In forecasting and inventory control textbooks and software applications, the variance of the cumulative lead-time forecast error is, almost invariably, taken as the sum of the error variances of the individual forecast intervals. For stationary demand and a constant lead time, this implies...

Previous research has shown that the forecast accuracy is to be distinguished from the performance of the forecasts when utility measures are employed. This is particularly true in an inventory management context, where the interactions between forecasting and stock control are not yet fully...

Forecasting demand at the individual stock-keeping-unit (SKU) level often necessitates the use of statistical methods, such as exponential smoothing. In some organizations, however, statistical forecasts will be subject to judgemental adjustments by managers. Although a number of empirical and...

Intermittent demand patterns are characterised by infrequent demand arrivals coupled with variable demand sizes. Such patterns prevail in many industrial applications, including IT, automotive, aerospace and military. An intuitively appealing strategy to deal with such patterns from a...

The standard method to forecast intermittent demand is that by Croston. This method is available in ERP type solutions such as SAP and specialised forecasting software packages (e.g. Forecast Pro), and often applied in practice. It uses exponential smoothing to separately update the estimated...