TY - JOUR

T1 - Judging the judges through accuracy-implication metrics

T2 - the case of inventory forecasting

AU - Syntetos, Aris A.

AU - Nikolopoulos, Konstantinos

AU - Boylan, John

PY - 2010/1/1

Y1 - 2010/1/1

N2 - A number of research projects have demonstrated that the efficiency of inventory systems does not relate directly to demand forecasting performance, as measured by standard forecasting accuracy measures. When a forecasting method is used as an input to an inventory system, it should therefore always be evaluated with respect to its consequences for stock control through accuracy implications metrics, in addition to its performance on the standard accuracy measures. In this paper we address the issue of judgementally adjusting statistical forecasts for 'fast' demand items, and the implications of such interventions in terms of both forecast accuracy and stock control, with the latter being measured through inventory volumes and service levels achieved. We do so using an empirical dataset from the pharmaceutical industry. Our study allows insights to be gained into the combined forecasting and inventory performance of judgemental estimates. It also aims to advance the practice of forecasting competitions by arguing for the consideration of additional (stock control) metrics when such exercises take place in an inventory context.

AB - A number of research projects have demonstrated that the efficiency of inventory systems does not relate directly to demand forecasting performance, as measured by standard forecasting accuracy measures. When a forecasting method is used as an input to an inventory system, it should therefore always be evaluated with respect to its consequences for stock control through accuracy implications metrics, in addition to its performance on the standard accuracy measures. In this paper we address the issue of judgementally adjusting statistical forecasts for 'fast' demand items, and the implications of such interventions in terms of both forecast accuracy and stock control, with the latter being measured through inventory volumes and service levels achieved. We do so using an empirical dataset from the pharmaceutical industry. Our study allows insights to be gained into the combined forecasting and inventory performance of judgemental estimates. It also aims to advance the practice of forecasting competitions by arguing for the consideration of additional (stock control) metrics when such exercises take place in an inventory context.

KW - Sales forecasting

KW - Judgemental forecasting

KW - Adjusting forecasts

U2 - 10.1016/j.ijforecast.2009.05.016

DO - 10.1016/j.ijforecast.2009.05.016

M3 - Journal article

VL - 26

SP - 134

EP - 143

JO - International Journal of Forecasting

JF - International Journal of Forecasting

SN - 0169-2070

IS - 1

ER -