Stock Control with Sporadic and Slow-Moving Demand

Choosing a stock-control method for a product depends on that product's demand distribution. This paper presents a simple method of classifying product demand into ‘smooth’, ‘slow-moving’ or ‘sporadic’, by partitioning the variance of demand during a lead time into causal parts. A study of a public utility showed demand distributions in each category to be of a specific nature. Stock-control and forecasting methods are developed, and simulation tests are described which compare these methods with (for ease of comparison) the assumption of continuous demand.

[1]  T. M. Whitin,et al.  A method for calculating optimal inventory levels and delivery time , 1955 .

[2]  Inventory Management of Slow-Moving Parts , 1956 .

[3]  Robert V. Hogg,et al.  Introduction to Mathematical Statistics. , 1966 .

[4]  Peter R. Winters,et al.  Forecasting Sales by Exponentially Weighted Moving Averages , 1960 .

[5]  Martin J. Beckmann,et al.  An Inventory Model for Arbitrary Interval and Quantity Distributions of Demand , 1961 .

[6]  G. H. Mitchell,et al.  Problems of Controlling Slow-Moving Engineering Spares , 1962 .

[7]  Martin J. Beckmann Dynamic Programming and Inventory Control , 1964 .

[8]  Edward A. Silver,et al.  Bayesian Determination of the Reorder Point of a Slow Moving Item , 1965 .

[9]  G. J. Feeney,et al.  The S-1, S Inventory Policy Under Compound Poisson Demand , 1966 .

[10]  T. A. Burgin,et al.  Stock Control—Experience and Usable Theory , 1967 .

[11]  Barnard E. Smith,et al.  A Learning Model for Inventory of Slow-Moving Items , 1969 .

[12]  Sheldon E. Haber,et al.  A methodology for estimating expected usage of repair parts with application to parts with no usage history , 1970 .

[13]  Edward A. Silver,et al.  Cost-Minimizing Inventory Control of Items Having A Special Type of Erratic Demand Pattern , 1971 .

[14]  F. G. Foster,et al.  The Effect of the Demand Distribution in Inventory Models Combining Holding, Stockout and Re-Order Costs , 1971 .

[15]  J. D. Croston Forecasting and Stock Control for Intermittent Demands , 1972 .

[16]  George F. Brown,et al.  A Bayesian approach to demand estimation and inventory provisioning , 1973 .

[17]  A. Vijaya Rao,et al.  A Comment on: Forecasting and Stock Control for Intermittent Demands , 1973 .

[18]  Stratton C. Jaquette,et al.  The initial provisioning decision for insurance type items , 1973 .

[19]  Edward A. Silver,et al.  A coordinated inventory control system for compound Poisson demand and zero lead time , 1975 .

[20]  Edward P. C. Kao A Discrete Time Inventory Model with Arbitrary Interval and Quantity Distributions of Demand , 1975, Oper. Res..

[21]  Multi-Item Inventory System Policies Using Statistical Estimates: Sporadic Demands (Variance/Mean = 9). , 1976 .

[22]  Donald Gross,et al.  Queueing Models for Spares Provisioning. , 1977 .

[23]  Edward A. Silver,et al.  Note---A Graphical Aid for Determining Optimal Inventories in a Unit Replenishment Inventory System , 1977 .

[24]  Y. Dirickx,et al.  A continuous review inventory model with compound poisson demand process and stochastic lead time , 1977 .

[25]  Compound distributions with efficient computation in inventory model applications , 1977 .

[26]  E. Silver,et al.  s, S Policies Under Continuous Review and Discrete Compound Poisson Demand , 1978 .

[27]  J. B. Ward Determining Reorder Points When Demand is Lumpy , 1978 .

[28]  Eliezer Naddor,et al.  Note---Sensitivity to Distributions in Inventory Systems , 1978 .

[29]  L. J. Thomas,et al.  Are Multi-Echelon Inventory Methods Worth Implementing in Systems with Low-Demand-Rate Items? , 1980 .

[30]  Leonard Fortuin,et al.  The All‐Time Requirement of Spare Parts for Service After Sales—Theoretical Analysis and Practical Results , 1980 .

[31]  T. Williams Reorder Levels for Lumpy Demand , 1982 .

[32]  Tables of Stock-Outs with Lumpy Demand , 1983 .