Thread: Demand Forecasting

Hello,

I'm in the middle of a project, and I'm stuck. It is about demand forecasting, and more specifically Croston's method (a more sophisticated form of exponential smoothing).

Croston's.xlsx download - 2shared -- the blue button.

I have a couple of questions (the Excel sheet can be downloaded from the link above; don't worry, no viruses):

1) How am I supposed to actually FORECAST using Zt when I need to use the demand for the current period /(Yt - Zt-1)/?

2) In order to see how accurate my forecast is, I use MAD and MSE. Should I use any other measures (besides MAPE as I have a lot of null values)?

3) Are the results of MAD and MSE good in this specific example?

4) I obtain best results for MSE and MAD when I use an alpha value of 1. Is this normal and should I do it, or should I stick to 0,1-0,2?


Thank you for your time and patience