Forecasting Demand for Weapon System Items
LOGISTICS MANAGEMENT INST MCLEAN VA
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The Defense Logistics Agency DLA, the DoDs wholesale manager for consumable hardware items, can improve forecasts of demand for weapon system items by changing its forecasting method to single exponential smoothing of historical demand. Overall, this method outperforms DLAs current forecasting method, as well as a program-based forecast, when forecasts are ranked in terms of supply performance for a given level of inventory investment. The program- based forecast performed slightly better than single exponential smoothing on single-application items from weapon systems with decreasing programs, but we do not recommend program-based forecasts even in this case, because of the difficulty of implementation. In contrast, single exponential smoothing is straightforward to implement, and it is already an option under DLAs Composite Forecasting, now under development. DLA should continue its current effort to project the effect of weapon system phaseouts on item demand. Item managers knowledge could then be used to reduce stock levels and buys for affected items.
- Logistics, Military Facilities and Supplies