Intermittent Demand Forecasting Blog
Forecast intermittent product demand and determine the optimal inventory level
The New Forecasting Technology derives from Probabilistic Forecasting, a statistical method that accurately forecasts both average product demand per period and customer service level inventory requirements.
The Kratos Space group within National Security technology innovator Kratos Defense & Security Solutions, Inc., produces COTS s software and component products for space communications – Making Parts Availability a Strategic Advantage
Anybody doing the job knows that managing inventory can be stressful. Common stressors include: Customers with “special” requests, IT departments with other priorities, balky ERP systems running on inaccurate data, raw material shortages, suppliers with long lead times in far-away countries where production often stops for various reasons and more. This note will address one particular and ever-present source of stress: demand variability.
Most demand forecasts are partial or incomplete: They provide only one single number: the most likely value of future demand. This is called a point forecast. Usually, the point forecast estimates the average value of future demand. Much more useful is a forecast of full probability distribution of demand at any future time. This is more commonly referred to as probability forecasting and is much more useful.