19. Forecasting Methodology and Gamma Smoothing: A Solution to Better Accuracy to Maintain Lean and Green
Introduction of Gamma Smoothing
Gamma smoothing is the culmination of a detailed examination of past forecast programs and their failures. The primary focus of this concept is a holistic integration of the needs of fortune 500 companies worldwide. It has been in practice for 20 years and continues to prove its superiority with increased service levels, turns, and low inventory.
Description of the Theory and the Formulas
Gamma smoothing always includes an underlining trend indicator (TI) to minimize the chance of out-of-stocks. The TI is a parameter that tells the system to add more trend component to the forecast. This becomes an automatic ...