Using imperfect advance demand information in forecasting

In this paper, we consider the demand-forecasting problem of a make-to-stock system operating in a business-to-business environment where some customers provide information on their future orders, which are subject to changes in time, hence constituting imperfect advance demand information. The demand is highly volatile and non-stationary not only because it is subject to seasonality and changing trends but also because some individual client demands have significant influence on the total demand. In such an environment traditional forecasting methods may result in highly inaccurate forecasts.