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The Theta model: an essential forecasting tool for supply chain planning

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Publication date2012
Host publicationAdvances in automation and robotics, Vol. 2: Selected Papers from the 2011 International Conference on Automation and Robotics (ICAR 2011), Dubai, December 1–2, 2011
EditorsGary Lee
Place of PublicationBerlin
PublisherSpringer Verlag
Pages431-437
Number of pages7
Volume2
ISBN (Electronic)9783642256462
ISBN (Print)9783642256455
Original languageEnglish

Publication series

NameLecture Notes in Electrical Engineering
PublisherSpringer
Volume123
ISSN (Print)1876-1100

Abstract

The Theta model created a lot of interest in academic circles due to its surprising performance in the M3-competition, the biggest ever time series forecasting competition. As a result in the subsequent years it became a benchmark in any empirical forecasting exercise and an essential tool for efficient Supply Chain Management ad planning as it provides very accurate point forecasts. The present study focuses on if the Theta model is a special case of Simple Exponential Smoothing with drift (SES-d). The Theta model outperforms SES-d in the Quarterly-M3 and Other-M3 subsets by 0.30% and 0.36%.