A Forecasting Method for Management of Seasonal Style-Goods Inventories

Because of high obsolescence costs, optimum decisions on the amounts of highly seasonal, styled items to place into inventory in anticipation of customer orders hinge primarily on the probabilities of selling these amounts before the end of the season. In a study of the operations of a textile manufacturer, methods, were developed for determining based on sales data the duration and timing of the selling seasons, and for forecasting total sales for the season for each individual item in the line, at different probability levels. From these, criteria for weekly re-evaluation of inventories are established.