This paper illustrates how individual forecasts and forecasting techniques may be evaluated by the use of established decision theory. Given the probability distribution of the forecast error, we first find the optimal strategy for a decision process, i.e., how to make the most efficient use of...

The definition of the cost of resources devoted to inventories which is inherent in the economic-lot-size procedure implies financial conditions which may not exist. This would lead to infeasibility and/or to a misstatement of carrying costs. If carrying costs are incorrectly stated, then in...