Warehouse Stock Parameter Setting

Jaison

1) Can somebody tell me what are the other probability distributions that are commonly witnessed across industries for demand at warehouses.
There are a number of other distributions that have been used acedemically. they are Laplace, Poission, Exponential, Geometric, to name a few - In general the test (quoted by Silver) is if the ratio Sigma(l) / x(l) is greater than 0.5 consider non-normal distributions, where sigma is the standard deviation of errors of forecasts over the replinishment leadtime in units and x(l) is the forecast demand over the replinishment leadtime in units.
Refer to Inventory management and Production Planning and Scheduling by Silver/Pike/Peterson see link
http://www.amazon.com/gp/product/0471119474/ref=cm_rdp_product_img

2) What will be the safety stock formula in case of these different distributions as many of these distribution are measured by parameters other than central tendency or variance. This is a significant area - again Silver covers in Chapter Seven of his book. The other reference is R.G.Brown - Advanced Service Parts Inventory Control (1980)- which was the basis for the Mercia-Lincs software - now absorbed into INFOR.

3) In case I have a data set of demand points at a warehouse, what techniques can I develop to identify the statistical distribution of the data set.[/quote - see answer to 1. In general the test (quoted by Silver page 273) is if the ratio Sigma(l) / x(l) is greater than 0.5 consider non-normal distributions, where sigma is the standard deviation of errors of forecasts over the replinishment leadtime in units and x(l) is the forecast demand over the replinishment leadtime in units.
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Berst of luck
Happy to talk
Dr Geoff Relph
Office 01386 710110
Mobile 0776 476 9166