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2012 | OriginalPaper | Chapter
The Theta Model: An Essential Forecasting Tool for Supply Chain Planning
Authors : Konstantinos Nikolopoulos, Vassilios Assimakopoulos, Nikolaos Bougioukos, Akrivi Litsa, Fotios Petropoulos
Published in: Advances in Automation and Robotics, Vol. 2
Publisher: Springer Berlin Heidelberg
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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%.