Article ID: | iaor20001954 |
Country: | United Kingdom |
Volume: | 50 |
Issue: | 7 |
Start Page Number: | 697 |
End Page Number: | 703 |
Publication Date: | Jul 1999 |
Journal: | Journal of the Operational Research Society |
Authors: | Buzacott J.A. |
Keywords: | forecasting: applications |
This paper is about periodic review inventory systems which are controlled by replenishing the inventory up to a target level which is set based on a demand forecast generated from past demands. It is shown that the replenishments will fluctuate more than final demand. Furthermore the effectiveness of a given safety stock is significantly reduced, indeed even with a very high target the maximum achievable service level can be quite limited. The paper is based on an actual spare parts inventory control system used in a domestic appliance company.