Estimating obsolescence risk from demand data - a case study

Willem van Jaarsveld

No EI 2010-03, Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute

Abstract: In this paper obsolescence of service parts is analyzed in a practical environment. Based on the analysis, we propose a method that can be used to estimate the risk of obsolescence of service parts. The method distinguishes groups of service parts. For these groups, the risk of obsolescence is estimated using the behavior of similar groups of service parts in the past. The method uses demand data as main information source, and can therefore be applied without the use of an expert's opinion. We will give numerical values for the risk of obsolescence obtained with the method, and the e®ects of these values on inventory control will be examined.

Keywords: forecasting; inventory; obsolescence; spare parts (search for similar items in EconPapers)
Date: 2010-02-17
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Citations: View citations in EconPapers (1)

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