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An examination of the size of orders from customers, their characterisation and the implications for inventory control of slow moving items

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An examination of the size of orders from customers, their characterisation and the implications for inventory control of slow moving items. / Johnston, F. R.; Boylan, John; Shale, E. A.

In: Journal of the Operational Research Society, Vol. 54, No. 8, 01.08.2003, p. 833-837.

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Johnston, F. R. ; Boylan, John ; Shale, E. A. / An examination of the size of orders from customers, their characterisation and the implications for inventory control of slow moving items. In: Journal of the Operational Research Society. 2003 ; Vol. 54, No. 8. pp. 833-837.

Bibtex

@article{4c1e71653f8d4b218de6ab02330c72ec,
title = "An examination of the size of orders from customers, their characterisation and the implications for inventory control of slow moving items",
abstract = "This paper examines half a million observations of the size of orders from customers at an electrical wholesaler. It notes: the distribution of the size of customer orders for a single item (stock keeping unit or SKU) is very skewed and resembles a geometric distribution; while the average size of an order is different for different items, for one SKU the mean order size is effectively the same at different branches even when the branches have very different demand rates; across a range of SKUs there is a strong relationship linking the mean and the variance of order size. The general results above are shown to apply to even the slowest movers. This extension is important because for items with intermittent demand the size of customer orders is required to produce an unbiased estimate of demand. Also a knowledge of the distribution of demand is important for setting maximum and minimum stock levels and the scheme employed is described.",
keywords = "inventory control, forecasting, distribution, statistics , order size",
author = "Johnston, {F. R.} and John Boylan and Shale, {E. A.}",
year = "2003",
month = aug,
day = "1",
doi = "10.1057/palgrave.jors.2601586",
language = "English",
volume = "54",
pages = "833--837",
journal = "Journal of the Operational Research Society",
issn = "0160-5682",
publisher = "Taylor and Francis Ltd.",
number = "8",

}

RIS

TY - JOUR

T1 - An examination of the size of orders from customers, their characterisation and the implications for inventory control of slow moving items

AU - Johnston, F. R.

AU - Boylan, John

AU - Shale, E. A.

PY - 2003/8/1

Y1 - 2003/8/1

N2 - This paper examines half a million observations of the size of orders from customers at an electrical wholesaler. It notes: the distribution of the size of customer orders for a single item (stock keeping unit or SKU) is very skewed and resembles a geometric distribution; while the average size of an order is different for different items, for one SKU the mean order size is effectively the same at different branches even when the branches have very different demand rates; across a range of SKUs there is a strong relationship linking the mean and the variance of order size. The general results above are shown to apply to even the slowest movers. This extension is important because for items with intermittent demand the size of customer orders is required to produce an unbiased estimate of demand. Also a knowledge of the distribution of demand is important for setting maximum and minimum stock levels and the scheme employed is described.

AB - This paper examines half a million observations of the size of orders from customers at an electrical wholesaler. It notes: the distribution of the size of customer orders for a single item (stock keeping unit or SKU) is very skewed and resembles a geometric distribution; while the average size of an order is different for different items, for one SKU the mean order size is effectively the same at different branches even when the branches have very different demand rates; across a range of SKUs there is a strong relationship linking the mean and the variance of order size. The general results above are shown to apply to even the slowest movers. This extension is important because for items with intermittent demand the size of customer orders is required to produce an unbiased estimate of demand. Also a knowledge of the distribution of demand is important for setting maximum and minimum stock levels and the scheme employed is described.

KW - inventory control

KW - forecasting

KW - distribution

KW - statistics

KW - order size

U2 - 10.1057/palgrave.jors.2601586

DO - 10.1057/palgrave.jors.2601586

M3 - Journal article

VL - 54

SP - 833

EP - 837

JO - Journal of the Operational Research Society

JF - Journal of the Operational Research Society

SN - 0160-5682

IS - 8

ER -