Periodic control of intermittent demand items : theory and empirical analysis

Syntetos, A; Babai, MZ; Dallery, Y; Teunter, R

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 interdemand
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.

Citation

Syntetos, A., Babai, M., Dallery, Y., & Teunter, R. (2009). Periodic control of intermittent demand items : theory and empirical analysis. Journal of the Operational Research Society, 60(5), 611-618. https://doi.org/10.1057/palgrave.jors.2602593

• Journal Article Type: Article
• Publication Date: Jan 1, 2009
• Deposit Date: Oct 13, 2011
• Journal: Journal of the Operational Research Society
• Print ISSN: 0160-5682
• Publisher: Palgrave Macmillan
• Peer Reviewed: Peer Reviewed
• Volume: 60
• Issue: 5
• Pages: 611-618
• DOI: https://doi.org/10.1057/palgrave.jors.2602593
• Keywords: Intermittent demand, forecasting, periodic stock control, military logistics, lead-time
• Publisher URL: http://dx.doi.org/ 10.1057/palgrave.jors.2602593
• Additional Information: Funders : Engineering and Physical Sciences Research Council (EPSRC); Projects : EPSRC: EP/D062942/1