Accession Number:

AD0745876

Title:

Some Alternatives to Exponential Smoothing in Demand Forecasting

Descriptive Note:

Technical rept.

Corporate Author:

NAVAL POSTGRADUATE SCHOOL MONTEREY CA

Personal Author(s):

• Zehna, Peter W.

Report Date:

1972-06-01

Pagination or Media Count:

39.0

Abstract:

The report contains a study devoted to a comparison of exponential smoothing with other alternatives to demand forecasting. Special attention is paid to the stock-out risks assumed whenever reorder levels are set using the various methods being compared. Models presently used by NavSup are employed in order that the results be applicable to the system in use. Simulation techniques are used for drawing comparisons. For constant mean, normal demand, it is shown that exponential smoothing does not produce as accurate results as ordinary maximum likelihood techniques. For the case of a linear mean changing with time, it is shown that the two methods are about comparable. Finally, a sequential Bayes forecasting method is defined and found to compare quite favorably with exponential smoothing. The need for additional study of Bayesian methods is established.

Descriptors:

• *INVENTORY CONTROL
• MATHEMATICAL MODELS
• MATHEMATICAL PREDICTION
• NAVAL EQUIPMENT
• STATISTICAL ANALYSIS

Subject Categories:

• Administration and Management
• Operations Research
• Logistics, Military Facilities and Supplies

Distribution Statement:

APPROVED FOR PUBLIC RELEASE