Forecasting errors using MAD
By: by Peter W. Zehna
Contributors: Naval Postgraduate School (U.S.)
Publisher: Naval Postgraduate School
Published: 1969
Place of publication: Monterey, California
Language: eng
Number of pages: 31
Subjects: Supplies and stores; Mathematical models; Inventory control; United States; Inventories; United States. Navy
Description: The paper is a study of the effects of using mean absolute deviation (MAD) to estimate variability in setting reorder levels for the inventory of a stock item. The method presently employed by NavSup in setting such reorder levels involves exponentially smoothed estimates of the mean and variance of the demand process. Any error involved in setting reorder levels results in a change in the underlying risk which in turn can be translated into costs. Such errors for the method of estimation presently employed are compared with standard maximum likelihood procedures. By simulating several normal systems, the smoothing technique is found to be inferior to classical methods with no reduction in computational difficulties. (Author)
Notes: Title from cover.

"April 1969"--Cover.

"NPS-55ZE9041A"--Cover.

Author(s) key words: Inventory theory, exponential smoothing, forecasting, mean absolute deviation, reorder levels.

Includes bibliographical references.

"Approved for public release; distribution unlimited"--Cover.

Technical report; 1969..

kmc/kmc 9/14/09.