Forecasting for intermittent demand: the estimation of an unbiased average

Forecasting for intermittent demand: the estimation of an unbiased average

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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: , ,
Keywords: inventory
Abstract:

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.

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