 Real options approach-based demand forecasting method for a range of products with highly volatile and correlated demandMing-Guan Huang European Journal of Operational Research, 2009, vol. 198, issue 3, 867-877 Abstract: To achieve a competitive edge needed for marketing highly competitive products, modern enterprises have actively sought to provide the marketplace with an expansive range of products with high random volatility of demand and correlations between demands of product. Consequently, traditional forecasting methods for separately forecasting demand for these products are likely to yield significant deviations. Therefore, this study develops a real options approach-based forecasting model to accurately predict future demand for a given range of products with highly volatile and correlated demand. Additionally, this study also proposes using Monte Carlo simulation to solve the demand forecasting model. The real options approach associated with Monte Carlo simulation not only deals effectively with random variation involving a particular demand stochastic diffusion process, but can handle the correlations in product demand. Keywords: Demand; forecasting; Demand; correlation; Real; options; approach; Monte; Carlo; simulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:198:y:2009:i:3:p:867-877 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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