Forecasting retail sales and dealer inventories: A simulation and decision support system

A simulation model for forecasting retail sales and dealer inventories is presented. The model is based on the average time in distribution (ATD), a new statistic calculated from warranty cards returned by customers after purchasing a product. While warranty card returns are highly random both in number and arrival rate, the ATD is a relatively stable indicator rarely used in forecasting. Sales and inventories are generated by fitting their estimated ATDs to warranty cards. A decision support system, incorporating the simulation model as well as the standard components database, model base, user interface, report and graph facilities is outlined and discussed.