A combined forecast—inventory control procedure for spare parts

Leo Strijbosch (), R M J Heuts and E H M van der Schoot
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R M J Heuts: Tilburg University
E H M van der Schoot: CMG Trade, Transport and Industry

Journal of the Operational Research Society, 2000, vol. 51, issue 10, 1184-1192

Abstract: Abstract This paper examines the performance of two different (s, Q) inventory models, namely a simple and an advanced model, for spare parts in a production plant of a confectionery producer in the Netherlands. The simple approach is more or less standard: the undershoot of the reorder level is not taken into account and the normal distribution is used as the distribution of demand during lead-time. The advanced model takes undershoots into account, differentiates between zero and nonzero demands during lead-time, and utilises the gamma distribution for the demand distribution. Both models are fed with parameters estimated by a procedure that forecasts demand sizes and time between demand occurrences separately (intermittent demand). The results show that the advanced approach yields a service level close to the desired one under many circumstances, while the simple approach is not consistent, in that it leads to much larger inventories in meeting the desired service level for all spare parts.

Keywords: forecasting; inventory; simulation; intermittent demand (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: A Combined Forecast-Inventory Control Procedure for Spare Parts (1999)
Working Paper: A Combined Forecast-Inventory Control Procedure for Spare Parts (1999)
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DOI: 10.1057/palgrave.jors.2601013

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