Forecasting sales and forecasting uncertainty
There are a large number of methods used for forecasting ranging from judgmental thru expert systems and time series to causal methods.
There are a large number of methods used for forecasting ranging from judgmental thru expert systems and time series to causal methods.
Good inventory management is essential to the successful operation for most organizations both because of the amount of money the inventory represents and the impact that inventories have on the daily operations.
We have thus shown through Monte-Carlo simulations, that the benefits of pooling will increase with the number of locations and that the benefits of risk pooling can be calculated without knowing the closed form of the demand distribution.
The introduction of uncertain supply has shown that profit can still be maximized however the profit will be reduced by increased costs both in lost sales and in excess inventory. But most important, profit variability will increase raising issues of possible other strategies.