1. ¹University of Salford, UK
2. ²Ecole Centrale Paris, France
3. ³Lancaster University, UK

Correspondence: AA Syntetos, Centre for OR and Applied Statistics, Salford Business School, University of Salford. Maxwell Building, The Crescent Greater Manchester M5 4WT, UK. E-mail: a.syntetos@salford.ac.uk

Received May 2007; Accepted February 2008; Published online 16 April 2008.

Abstract

In this paper we propose a modification to the standard forecasting, periodic order-up-to-level inventory control approach to dealing with intermittent demand items, when the lead-time length is shorter than the average inter-demand interval. In particular, we develop an approach that relies upon the employment of separate estimates of the inter-demand intervals and demand sizes, when demand occurs, directly for stock control purposes rather than first estimating mean demand and then feeding the results in the stock control procedure. The empirical performance of our approach is assessed by means of analysis on a large demand data set from the Royal Air Force (RAF, UK). Our work allows insights to be gained on the interactions between forecasting and stock control as well as on demand categorization-related issues for forecasting and inventory management purposes.