A New Metric for Lumpy and Intermittent Demand Forecasts: Stock-keeping-oriented Prediction Error Costs

@article{Martin2020ANM,
  title={A New Metric for Lumpy and Intermittent Demand Forecasts: Stock-keeping-oriented Prediction Error Costs},
  author={Dominik Martin and Phil Spitzer and Niklas K{\"u}hl},
  journal={ArXiv},
  year={2020},
  volume={abs/2004.10537}
}
Forecasts of product demand are essential for short- and long-term optimization of logistics and production. Thus, the most accurate prediction possible is desirable. In order to optimally train predictive models, the deviation of the forecast compared to the actual demand needs to be assessed by a proper metric. However, if a metric does not represent the actual prediction error, predictive models are insufficiently optimized and, consequently, will yield inaccurate predictions. The most… Expand
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