Intermittent demand forecasting : context, methods and applications

"Demand forecasting is a crucial operational function that constitutes the basis for many important organisational planning and control activities. Industry sectors such as the military, aerospace, automotive, IT and after-sales deal routinely with products characterised by intermittent demand. In fact, in many of these sectors, the majority of the spare parts have demand which is intermittent. The term intermittent' means that demand does not occur in every period and, when it does occur, it does so sporadically. These products usually, but not always, have a low volume of annual demand. This has led some to dismiss them as unimportant, particularly if they are low-cost items. Whilst an individual low-volume product is relatively unimportant, the whole collection of intermittent demand items is very important. Collectively, they constitute a significant proportion of the overall value of stock. If they can be managed more effectively, there will be reduced obsolescence, which will lead to less scrap. The consequent environmental and business benefits are obvious."