Periodic control of intermittent SKUs Periodic control of intermittent demand items: theory and empirical analysis AA Syntetos 1 ∗ , MZ Babai 1 , Y Dallery 2 and R. Teunter 3 1 University of Salford, UK ; 2 Ecole Centrale Paris, France ; and 3 Lancaster University, UK Abstract In this paper we propose a modification to the standard forecasting, periodic order-up-to- level inventory control approach to dealing with intermittent demand items, when the lead-time length is shorter than the average inter-demand interval. In particular, we develop an approach that relies upon the employment of separate estimates of the inter- demand intervals and demand sizes, when demand occurs, directly for stock control purposes rather than first estimating mean demand and then feeding the results in the stock control procedure. The empirical performance of our approach is assessed by means of analysis on a large demand data set from the Royal Air Force (RAF, UK). Our works allows insights to be gained on the interactions between forecasting and stock control as well as on demand categorization related issues for forecasting and inventory management purposes. Keywords: Intermittent demand, forecasting, periodic stock control, military logistics, lead-time Acknowledgements: The research described in this paper has been supported by the Engineering and Physical Sciences Research Council (EPSRC, UK) grant no. EP/D062942/1. More information on this project may be obtained at: http://www.mams.salford.ac.uk/CORAS/Projects/Forecasting/. Moreover we would like to acknowledge the constructive comments received by Dr Zied Jemai (Ecole Centrale Paris) and Professor John E. Boylan (Buckinghamshire Chilterns University College). ∗ Corresponding author : Centre for OR and Applied Statistics, Salford Business School University of Salford, Maxwell Building, Greater Manchester M5 4WT, UK Tel. No. +(44) (0) 161 295 5804, Fax no. +(44) (0) 161 295 5556 e-mail: a.syntetos@salford.ac.uk 1