Predictionintervalbased Purchase Strategy in Agreement for Slowmoving Electric Power Materials

Abstract

Abstract:

The dilemma in inventory management of electric power materials with slow-moving demand is defined and resolved by purchase in agreement. A proposed prediction interval of estimated aggregate future demand rate is constructed for a product pool in which all products have no demand historically. A simulation study examines the reliability of the methodology across various parameters. The adaptable parameters are employed in the selection of electric power materials. The interval of demand rate for those with an observed demand of zero in given period out of all selected materials is estimated. The prediction interval of aggregate demand rate and the real price level are combined to calculate the sum for funding the demand of those materials in a time unit. The purchase contract price in agreement is decided accordingly, by which electric power enterprises are allowed to boost purchase efficiency and achieve inventory management objectives of both zero cost and high service level.

Key words: electric power materials, slowmoving demand, prediction interval, purchase in agreement

JIANG Aiping, GAO Junjun, CHI Qiuguo， ZHU Ruoyang. Predictionintervalbased Purchase Strategy in Agreement for Slowmoving Electric Power Materials[J]. Industrial Engineering Journal .

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