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The effects of integrating management judgement into intermittent demand forecasts

Syntetos, A and Nikolopoulos, K and Boylan, J and Fildes, R A and Goodwin, P (2009) The effects of integrating management judgement into intermittent demand forecasts. International Journal of Production Economics, 118 (1). pp. 72-81. ISSN 0925-5273

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    Abstract

    Empirical research suggests that quantitatively derived forecasts are very frequently judgementally adjusted. Nevertheless, little work has been conducted to evaluate the performance of these judgemental adjustments in a practical demand/sales context. In addition, the relevant analysis does not distinguish between slow and fast moving items. Currently, there are neither conceptual developments nor empirical evidence on the issue of integrating judgements and statistical forecasts for slow/intermittent demand items. Moreover, no results have ever been reported on the stock control implications of these human judgements. Our work analyses monthly intermittent demand forecasts for the UK branch of a major international pharmaceutical company. The company relies upon a commercially available statistical forecasting system to produce forecasts that are subsequently judgementally adjusted based on marketing intelligence gathered by the company forecasters. The benefits of the intervention are evaluated by comparing the actual sales to system and final forecasts using both forecast accuracy and inventory control (accuracy implication) metrics. Our study allows insights to be gained on potential improvements to intermittent demand forecasting processes and, subsequently, the design effectiveness of forecasting support systems.

    Item Type: Article
    Journal or Publication Title: International Journal of Production Economics
    Subjects:
    Departments: Lancaster University Management School > Management Science
    ID Code: 45490
    Deposited By: ep_importer_pure
    Deposited On: 11 Jul 2011 19:33
    Refereed?: Yes
    Published?: Published
    Last Modified: 09 Apr 2014 22:32
    Identification Number:
    URI: http://eprints.lancs.ac.uk/id/eprint/45490

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