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TERM PAPER PROGRESS

TERM PAPER PROGRESS. FORECASTING IRREGULAR DEMAND FOR SPARE PARTS INVENTORY DANG QUANG VINH. Main Idea. It is necessary to use demand distributions rather than expected values of demand. The irregular patterns characteristic of low demand parts require a probabilistic approach.

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TERM PAPER PROGRESS

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  1. TERM PAPER PROGRESS FORECASTING IRREGULAR DEMAND FOR SPARE PARTS INVENTORY DANG QUANG VINH

  2. Main Idea • It is necessary to use demand distributions rather than expected values of demand. • The irregular patterns characteristic of low demand parts require a probabilistic approach. • Estimate the sum of the demand over the lead time.

  3. First forecasting model • Xt : observed demand in period t, t=1…T • L : fixed lead time • LTD : lead time demand • Yt : mean level of demand at time t • : smoothing factor (0,1) • Assume that LTD is decribed by normal distribution

  4. First forecasting model • Basing on exponential smoothing method: (t=1…T) • Using solver add-in to find out with taking minimizing MSE into account.

  5. First forecasting model • Estimate the mean of L demands within the lead time:

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