Custom Method to Forecast Intermittent Products

Ganesh Sankaran (), Federico Sasso (), Robert Kepczynski () and Alessandro Chiaraviglio ()
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Federico Sasso: Deloitte Consulting AG
Alessandro Chiaraviglio: Polytechnic University of Turin

Chapter Chapter 5 in Improving Forecasts with Integrated Business Planning, 2019, pp 283-313 from Springer

Abstract: Abstract In this chapter, we explain how to run forecasting with custom methods based on the Markov analysis for intermittent product segments. It leverages the Markov ability of predicting the probability of zero and non-zero demand, while sizing the non-zero demand states. This method has been proven in many industrial applications, and we decided to transpose it into the forecasting context. Markov analysis coupled with sizing of non-zero periods requires more statistical knowledge than the standard Croston method, but the additional effort is justified and explained by the new value add by the custom method. We have used SAP IBP configuration and charting options to develop the above-described custom approach.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-3-030-05381-9_5

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DOI: 10.1007/978-3-030-05381-9_5

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