Abstract
In this paper, we propose a general probabilistic model for modeling the evolution of demand forecasts, referred to as the Martingale Model of Forecast Evolution (MMFE). We combine the MMFE with a linear programming model of production and distribution planning implemented in a rolling horizon fashion. The resulting simulation methodology is used to analyze safety stock levels for a multi-product/multi-plant production/distribution system with seasonal stochastic demand. In the context of this application we demonstrate the importance of good forecasting.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.