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

  1. Lookup NU author(s)
  2. Seong Moon
  3. Professor Christian Hicks
  4. Dr Andrew Simpson
Author(s)Moon S, Hicks C, Simpson A
Editor(s)Grubbstrom RW; Hinterhuber HH
Publication type Conference Proceedings (inc. Abstract)
Conference NameSixteenth International Working Seminar on Production Economics
Conference LocationInnsbruck, Austria
Year of Conference2010
Source Publication Date1-5 March 2010
Number of Volumes4
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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.