Combine forecasting method performances for demand forecasting : an exploratory study

Forecasting is the basis of the decision making process in production. The need to make forecasts in the management and operations is increasing, especially in order to achieve its objectives. Choosing an individual method is more risky than choosing a combination forecast and choosing the individua...

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Bibliographic Details
Main Authors: Ramlan, Rohaizan, Raja Mohd Rasi, Raja Zuraidah, Mohd Raya, Nur Diyana
Format: Article
Published: American-Eurasian Network for Scientific Information 2014
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Online Access:http://www.aensiweb.com/JASR
http://www.aensiweb.com/JASR
http://eprints.uthm.edu.my/8190/1/1.pdf
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Summary:Forecasting is the basis of the decision making process in production. The need to make forecasts in the management and operations is increasing, especially in order to achieve its objectives. Choosing an individual method is more risky than choosing a combination forecast and choosing the individual method may have significantly worse performance than the chosen combination. Hence, the purpose of this exploratory study is to implement and compare the performances of combination forecasting methods. The inventory demand data collected for eight consecutive years. The combine forecast methods used are equal weight combination method and multiple regression combination method. The best forecast method is multiple regressions that provides almost the same demand to the actual product demand and has the lowest total rank of forecast accuracy.