Croston's Method

Croston's Method is a technique used to forecast demand for items that are ordered infrequently and irregularly, such as spare parts. It separates the process into two parts: estimating the average demand when an item is used and measuring the time between these demands. By updating these estimates with each actual demand, it provides a more accurate forecast of future needs, accounting for unpredictability. This helps businesses plan inventory better, reducing stockouts or excess stock, especially when dealing with sporadic usage patterns.