The exponential smoothing and i.i.d. demand process are often used to forecast demand in practice without justifying their appropriateness. In this paper, it is asserted that demand process may differ from exponential smoothing or i.i.d. process. The ...
The exponential smoothing and i.i.d. demand process are often used to forecast demand in practice without justifying their appropriateness. In this paper, it is asserted that demand process may differ from exponential smoothing or i.i.d. process. The demand generated by a general ARMA process are suggested to describe a true demand process and the expression of variances of leadtime demand and reorder point are derived for ARMA(p,q), exponential smoothing and i.i.d. demand model. In numerical investigation, the performance of the models are compared.