The effects of integrating management judgement into intermittent demand forecasts

Aris A. Syntetos, Konstantinos Nikolopoulos, John E. Boylan, Robert Fildes, Paul Goodwin

Research output: Contribution to journalArticlepeer-review

73 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)72-81
Number of pages10
JournalInternational Journal of Production Economics
Volume118
Issue number1
DOIs
Publication statusPublished - Mar 2009
Event14th International Symposium on Inventories - Budapest, Hungary
Duration: 1 Mar 2006 → …

Keywords

  • Intermittent demand
  • Forecasting support systems
  • Stock control
  • Judgemental forecasts

Fingerprint Dive into the research topics of 'The effects of integrating management judgement into intermittent demand forecasts'. Together they form a unique fingerprint.

Cite this