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Judging the judges through accuracy-implication metrics: the case of inventory forecasting

Syntetos, A, Nikolopoulos, K and Boylan, JE 2010, 'Judging the judges through accuracy-implication metrics: the case of inventory forecasting' , International Journal of Forecasting, 26 (1) , pp. 134-143.

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Abstract

A number of research projects have demonstrated that the efficiency of inventory systems does not relate directly to demand forecasting performance, as measured by standard forecasting accuracy measures. When a forecasting method is used as an input to an inventory system, it should therefore always be evaluated with respect to its consequences for stock control through accuracy implications metrics, in addition to its performance on the standard accuracy measures. In this paper we address the issue of judgementally adjusting statistical forecasts for ‘fast’ demand items, and the implications of such interventions in terms of both forecast accuracy and stock control, with the latter being measured through inventory volumes and service levels achieved. We do so using an empirical dataset from the pharmaceutical industry. Our study allows insights to be gained into the combined forecasting and inventory performance of judgemental estimates. It also aims to advance the practice of forecasting competitions by arguing for the consideration of additional (stock control) metrics when such exercises take place in an inventory context.

Item Type: Article
Themes: Subjects outside of the University Themes
Schools: Colleges and Schools > College of Business & Law > Salford Business School > Operations and Information Management
Journal or Publication Title: International Journal of Forecasting
Publisher: Elsevier
Refereed: Yes
ISSN: 0169-2070
Funders: Engineering and Physical Sciences Research Council (EPSRC)
Depositing User: Professor Aris Syntetos
Date Deposited: 13 Oct 2011 11:03
Last Modified: 28 Jul 2015 17:37
URI: http://usir.salford.ac.uk/id/eprint/18305

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