A comparison of unconstrained and constrained ordinary least squares for the combination of demand forecasts: A case study of the ordering and stocking of bank printed forms

A leading bank in Hong Kong consumes more than three hundred kinds of printed forms for its daily operations. It has an inventory control system for the forms management. A major problem of the system is to forecast the monthly demand of these forms. In this study, the idea of combination of forecasts is introduced and its practical problem is addressed. The individual forecasts come from well-established time series models and the weights for combination are estimated with quadratic programming.