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Forecasting the Long Tail and Intermittent Demand

For most businesses, the “long tail” is growing. You don’t have to be an internet retailer like Amazon to see it. Companies are dealing with more slow moving items with intermittent demand and unpredictable demand patterns.

 

This trend is making forecasting and inventory management more difficult. As Lora Cecere wrote in “Of Long Tails and Supply Chains”:“

 

The deterministic, replenishment logic traditionally found in advanced planning and scheduling (APS) technologies are not a good fit for the long end of the tail. Bottom line, in this scenario, traditional inventory techniques—safety stock logic based on normal demand distribution — just don’t work.”