# Archive | Forecasting

## Bugs Fixed in Simulation Spreadsheet

Some incorrect formulae were found in the simulation spreadsheet described in the article entitled “An Educational Inventory Management Simulator“. They have been fixed.

## Lead Time Analysis – Part 2

This article contains information concerning the mathematics involved in the spreadsheets which are described in Part 1. That article was revised on 5 March 2017 and the spreadsheets were revised on 19 February 2017. It is assumed that the readers of this article have some knowledge of statistical mathematics. Any row which is concerned with […]

## Lead Time Analysis – Part 1

Replenishment decisions rely on forecasts of lead times amongst other things. If the mean lead time for an item is not expected to change much then the average of recent lead times for the item can be used. Unless that item is purchased frequently, there won’t be many lead times to use for averaging purposes. […]

## Principles of Good Inventory Management

It is easy to reduce investment in inventory if you don’t mind a deterioration in customer service. Likewise, it is easy to provide good customer service if you don’t mind having a large investment in inventory. Good inventory management is concerned with having a low investment in inventory in relation to the customer service provided […]

## Monte Carlo Simulator – Part 2

This article contains detailed information concerning the online Monte Carlo inventory management simulator which can be accessed by clicking on the “Simulator” tab in the menu at the top of the page. In parts of this article, it will be assumed that the reader has some knowledge of statistics. If you don’t have a statistical […]

## Monte Carlo Simulator – Part 1

There is now an online Monte Carlo inventory management simulator available for use. Clicking on the “Simulator” tab in the  menu at the top of the page will open the simulator in a new browser tab. Click here for instructions for using it. Each simulation is carried out for each day until there have been […]

## Inventory Management Simulation

This article provides an overview of inventory management simulation and its use for testing algorithms. If you want to use a particular algorithm for demand forecasting or reordering then it is desirable to simulate the effects first in order to avoid unpleasant surprises. A useful starting point is to use a spreadsheet to gain a […]

## Demand Rate Estimation

Introduction If there is no evidence of trend or seasonal effects then forecasting using demand history alone usually simply involves estimation of the demand rate (mean demand per unit time). All of the algorithms mentioned in this article can be used as a basis for forecasting involving trend and seasonal effects. The performance of each […]

## Evaluating Forecasting Algorithms

Introduction In order to determine when and how much of an item to order, it is necessary to have a forecast of customer demands. The human brain is not as good as appropriate statistical analysis at interpreting statistical data. Forecasting of customer demands using demand history alone is, therefore, better done by a computer using […]