Croston’s – Modified Method
Studies indicate that you can enhance forecasting accuracy by using a modified version of Croston’s Method. This approach considers the effects from the last two periods of demands, which is particularly beneficial when the intervals between demands are changing.
Initialization
This is similar to the Croston’s Method.
Iteration
Iteration over periods i and using q as the interval between last three periods of demand
Forecast
This is calculated either as constant (average) or sporadic:
- For Sporadic, the forecast is distributed according to the mean interval X.
- For Constant (average), the forecast is distributed according to the mean interval
X.