I will be hosting a special session on Estimating Demand Uncertainty in the upcoming International Society for Inventory Research conference ISIR2016.
The link between forecasting and inventory calculations is often not as clear as it should be. This is evident by the formulas used for the safety stock calculation: the expected demand and its uncertainty are often based on very strong assumptions (stationarity, normality, i.i.d errors, etc) and are not valid when looking at the empirical results from real world forecast. The focus of this session will be to progress this discussion by looking how forecasts and their errors should be best translated to support inventory decisions.
Particular focus will be on:
- the estimation expected demand, demand uncertainty and its distributional aspects, attempting to answer the question how to update the formuli to reflect non-independent errors, which occur by construction in our forecasts.
- update our formuli to remove unrealistically strong assumptions, so as to reflect reality and support practice. The main interest is to do so in a way that can be transfered to practice.
The abstract submission deadline is on the 31st of March 2016. A selection of submitted works will be published in a special issue of the International Journal of Production Economics. For more details see the submission information at the conference website. When submitting your abstract you will be able to select the special session there.
Please contact me if you are interested or have any more questions, or leave a comment below.