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The development of a hierarchical forecasting method for predicting spare parts demand in the South Korean Navy - a case study

Lookup NU author(s): Seong Moon, Professor Christian Hicks, Dr Andrew Simpson


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In the South Korean Navy the demand for many spare parts is infrequent and the volume of items required is irregular. This pattern, known as non-normal demand, makes forecasting difficult. This paper uses data obtained from the South Korean Navy to compare the performance of various forecasting methods that use hierarchical and direct forecasting strategies for predicting the demand for spare parts. A simple combination of exponential smoothing models was found to minimise forecasting errors. A simulation experiment verified that this approach also minimised inventory costs.

Publication metadata

Author(s): Moon S, Hicks C, Simpson A

Publication type: Article

Publication status: Published

Journal: International Journal of Production Economics

Year: 2012

Volume: 140

Issue: 2

Pages: 794-802

Print publication date: 21/02/2012

ISSN (print): 0925-5273

Publisher: Elsevier BV


DOI: 10.1016/j.ijpe.2012.02.012

Notes: Special Issue: includes selection of papers originally presented at the Sixteenth International Working Seminar on Production Economics, Innsbruck, March 1–5, 2010.


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