THE HERMITE DISTRIBUTION AS A MODEL OF DEMAND DURING LEAD TIME FOR SLOW‐MOVING ITEMS

Heretofore, the Poisson and the Laplace distributions have been used to model demand during lead time for slow-moving items. In this paper, we present a Poisson-like distribution called the Hermite. The advantage of the Hermite is that it is as simple to use as the Poisson and the Laplace are. Moreover, the Hermite is the exact distribution of demand during lead time when unit demand is Poisson, P(Λ), and lead time is normally distributed, N(μ, σ2), so long as (μ/σ2)≥Λ. Thus, the Hermite can enhance the accuracy of analysis as well as add to the tools available to the analyst.