Simulation approach in stock control of products with sporadic demand

Croston's method and its modifications are the most commonly used methods in sporadic demand of product stock management systems. This method eliminates the drawbacks of classical exponential smoothing and secures sufficient stock levels during order lead time period. The disadvantage of Croston's method is the fact that it solves only the question of the reorder point but does not solve the problem of restocking delivery volume and the mechanism of ordering. The questions are how to refill stocks and what level of restocking deliveries to implement in order to secure economic efficiency while still maintaining demanded service levels. One of the promising ways of solving stated problems is to apply the dynamic simulation method. The aim of this article is to introduce sporadic demand product stock management method based on dynamic simulation, which would offer simple and easily interpretable answers on basic questions connected to effective stock management.