Determining when to update the weights in combined forecasts for product demand - An application of the CUSUM technique

Chi Kin Chan, Brian G. Kingsman, H. Wong

Research output: Journal article publicationJournal articleAcademic researchpeer-review

15 Citations (Scopus)

Abstract

Combining forecasts merges several separate sets of forecasts to form a better composite forecast. There has been much published work on how to find the optimal combining weights. Several authors have suggested that changing the weights from time to time would be better than using fixed weights (FW). The unresolved problem is when to change the weights, on a regular basis or otherwise. The aim of this paper is to use the techniques of quality control to decide when we need to change the combining weights. An efficient and simple method to control the weights of the combined forecast is proposed and shown to perform better than one based on FW.
Original languageEnglish
Pages (from-to)757-768
Number of pages12
JournalEuropean Journal of Operational Research
Volume153
Issue number3 SPEC. ISS.
DOIs
Publication statusPublished - 16 Mar 2004

Keywords

  • Combined forecast
  • CUSUM
  • Quality control
  • V-Mask

ASJC Scopus subject areas

  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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