Demand forecasting model for slow moving items
by Ekambaram Dhakshayani; S. Narayanan
International Journal of Logistics Systems and Management (IJLSM), Vol. 19, No. 2, 2014

Abstract: Demand forecasting for a slow moving product is a critical area of concern and becomes crucial to find the optimistic forecast value for a slow moving product which results in huge inventory ultimately affecting the cost. The two new models namely probabilistic demand model (PDM) and demand size-based model (DSBM) have been developed in this work by modifying the Croston's model. Probabilistic demand model (PDM) has been developed by considering actual probabilities in the demand size per period and demand size-based model (DSBM) by directly estimating the demand size without any average per period considerations. Comparative study with the commonly used demand forecasting methods shows that the models follow close approximations to them and are versatile with different values of smoothing constant.

Online publication date: Sat, 13-Sep-2014

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