This paper presents a methodology for estimating the demand pattern for the slowest-moving C category inventory items. The methodology uses an aggregation-by-items scheme and a forecasting procedure based on conditional demand analysis whereby aggregate demand is assumed to be an arbitrarily mixed, heterogeneous Poisson distribution. Practical aspects of demand heterogeneity, parameter estimation and model implementation are illustrated using a case study in retail inventory planning and control.
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Bradford et al. (1997) studied this question.
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