Forecast Accuracy Metrics for Intermittent Demands: Look at the Entire Distribution of Demands

While most forecast-error metrics are averages of forecast errors, Tom argues that, for intermittent-demand series, we should focus on the demand distribution and assess forecast error at each distinct level of demand. He illustrates how this can be done, and he suggests use of the chi-square statistic to judge the overall effectiveness of the forecast method. Copyright International Institute of Forecasters, 2006