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3.6.4 Summary

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In some ways, the fill rate is the most natural service measure for intermittent demand. The concept is straightforward to explain to managers and is often used in practice. However, the implementation of the fill rate calculation raises some technical issues. Adjustments are needed to avoid double counting of backorders. Although these adjustments do make the calculation more complex, they may be beneficial, particularly for those items with lumpy demand patterns. The formulae given in this section and in Technical Note 3.1 require distributions of demand over the lead time or longer. If the demand is assumed to be independent and identically distributed, then these distributions may be obtained from the distribution of demand per period. Selecting this distribution will become our focus of attention in Chapters 4 and 5.

Intermittent Demand Forecasting

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