Article ID: | iaor20071565 |
Country: | United Kingdom |
Volume: | 57 |
Issue: | 5 |
Start Page Number: | 588 |
End Page Number: | 592 |
Publication Date: | May 2006 |
Journal: | Journal of the Operational Research Society |
Authors: | Johnston F.R., Boylan J.E., Shale E.A. |
Keywords: | inventory |
The majority of the range of items held by many stockists exhibit intermittent demand. Accurate forecasting of the issue rate for such items is important and several methods have been developed, but all produce biased forecasts to a greater or lesser degree. This paper derives the bias expected when the order arrivals follow a Poisson process, which leads to a correction factor for application in practice. Extensions to some other arrival processes are briefly considered.