TY - JOUR
T1 - The effects of integrating management judgement into intermittent demand forecasts
AU - Syntetos, Aris A.
AU - Nikolopoulos, Konstantinos
AU - Boylan, John E.
AU - Fildes, Robert
AU - Goodwin, Paul
N1 - Proceedings paper from 14th International Symposium on Inventories (Int Soc Invent Res), Budapest, Hungary, August 2006
PY - 2009/3
Y1 - 2009/3
N2 - 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.
AB - 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.
KW - Intermittent demand
KW - Forecasting support systems
KW - Stock control
KW - Judgemental forecasts
UR - http://www.scopus.com/inward/record.url?scp=61449256538&partnerID=8YFLogxK
UR - http://dx.doi.org/10.1016/j.ijpe.2008.08.011
U2 - 10.1016/j.ijpe.2008.08.011
DO - 10.1016/j.ijpe.2008.08.011
M3 - Article
VL - 118
SP - 72
EP - 81
JO - International Journal of Production Economics
JF - International Journal of Production Economics
SN - 0925-5273
IS - 1
T2 - 14th International Symposium on Inventories
Y2 - 1 March 2006
ER -