Periodic control of intermittent demand items: theory and empirical analysis

Case-Oriented Paper

Abstract

In this paper we propose a modification to the standard forecasting, periodic order-up-to-level inventory control approach to dealing with intermittent demand items, when the lead-time length is shorter than the average inter-demand interval. In particular, we develop an approach that relies upon the employment of separate estimates of the inter-demand intervals and demand sizes, when demand occurs, directly for stock control purposes rather than first estimating mean demand and then feeding the results in the stock control procedure. The empirical performance of our approach is assessed by means of analysis on a large demand data set from the Royal Air Force (RAF, UK). Our work allows insights to be gained on the interactions between forecasting and stock control as well as on demand categorization-related issues for forecasting and inventory management purposes.

Keywords

intermittent demand forecasting periodic stock control military logistics lead-time 

Notes

Acknowledgements

The research described in this paper has been supported by the Engineering and Physical Sciences Research Council (EPSRC, UK) grant no. EP/D062942/1. More information on this project may be obtained at: http://www.mams.salford.ac.uk/CORAS/Projects/Forecasting/. Moreover, we would like to acknowledge the constructive comments received by Dr Zied Jemai (Ecole Centrale Paris) and Professor John E. Boylan (Buckinghamshire New University).

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Copyright information

© Palgrave Macmillan 2008

Authors and Affiliations

  1. 1.University of SalfordUK
  2. 2.Ecole Centrale ParisFrance
  3. 3.Lancaster UniversityUK

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