Forecasting

Sven Axsäter ()
Additional contact information
Sven Axsäter: Lund University

Chapter 2 in Inventory Control, 2015, pp 7-35 from Springer

Abstract: Abstract There are two main reasons why an inventory control system needs to order items some time before customers demand them. First, there is nearly always a lead-time between the ordering time and the delivery time. Second, due to certain ordering costs, it is often necessary to order in batches instead of unit for unit. These two reasons mean that we need to look ahead and forecast the future demand. A demand forecast is an estimated average of the demand size over some future period. But it is not enough to estimate the average demand. We also need to determine how uncertain the forecast is. If the forecast is more uncertain, a larger safety stock is required. Consequently, it is also necessary to estimate the forecast error, which may be represented by the standard deviation or the so-called Mean Absolute Deviation (MAD).

Keywords: Forecast Error; Forecast System; Future Period; Spare Part; Demand Model (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-319-15729-0_2

Ordering information: This item can be ordered from
http://www.springer.com/9783319157290

DOI: 10.1007/978-3-319-15729-0_2

Access Statistics for this chapter

More chapters in International Series in Operations Research & Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().