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3.2.3 Summary

Оглавление

Order‐up‐to (OUT) levels are sometimes set by using a rule of thumb of multiplying the forecasted demand (per period) by a set number of periods. This ignores the degree of demand uncertainty, leading to a misdirection of inventory investment. Consequently, rules of thumb like this are not recommended.

Judgemental adjustment of orders may be worthwhile in some situations. These adjustments should be continually monitored, to evaluate their effects on price benefits and inventory costs.

Intermittent Demand Forecasting

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