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A note on the forecast performance of temporal aggregation
Author(s) -
RostamiTabar Bahman,
Babai Mohamed Zied,
Syntetos Aris,
Ducq Yves
Publication year - 2014
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/nav.21598
Subject(s) - aggregate (composite) , computer science , econometrics , operations research , demand forecasting , process (computing) , data aggregator , economics , mathematics , computer network , materials science , wireless sensor network , composite material , operating system
Earlier research on the effects of nonoverlapping temporal aggregation on demand forecasting showed the benefits associated with such an approach under a stationary AR(1) or MA(1) processes for decision making conducted at the disaggregate level. The first objective of this note is to extend those important results by considering a more general underlying demand process. The second objective is to assess the conditions under which aggregation may be a preferable approach for improving decision making at the aggregate level as well. We confirm the validity of previous results under more general conditions, and we show the increased benefit resulting from forecasting by temporal aggregation at lower frequency time units. © 2014 Wiley Periodicals, Inc. Naval Research Logistics 61: 489–500, 2014