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Journal Article Forecasting Service Parts Demand for a Discontinued Product
Cited 33 time in scopus Share share facebook twitter linkedin kakaostory
Authors
Jung Sik Hong, Hoon-Young Koo, Chin-Seung Lee, Jae Kyoung Ahn
Issue Date
2008-07
Citation
IIE Transactions, v.40, no.7, pp.640-649
ISSN
0740-817x
Language
English
Type
Journal Article
DOI
https://dx.doi.org/10.1080/07408170701745337
Abstract
Stochastic demand forecasting methods for service parts of a discontinued product are proposed. The identified four major factors are the number of product sales, the discard rate of the product, the failure rate of the service part, and the replacement probability of the failed part. During a given period, typically a year, the number of failed service parts is estimated using the first three factors, and then the demand for those service parts is obtained with the use of the last factor. A stochastic model is derived to estimate the demand in a certain prediction interval, and the closed-form solutions in the case of a constant failure rate are provided. An approximate model is proposed to render actual computation possible when the part failure time is not distributed exponentially. Numerical data from the automotive industry are used to validate the model.
KSP Keywords
Approximate models, Automotive Industry, Demand Forecasting, Failure Rate, Numerical data, Prediction interval, Stochastic model, closed-form solution, failure time, forecasting method, product sales