ABSTRACT
Historical forecasting can deal with most situations for the majority of items. There is no need to forecast for customer scheduled requirements unless the supply lead time exceeds the firm planned schedules. When forecasting is good, safety stock is small. The amount of stock investment depends largely on the quality of the forecasts and the supplier delivery scheduling. Historical forecasting works well for the vast majority of items and is therefore a basic tool of inventory control. The simplest professional forecasting technique is exponential smoothing. Assessing the best individual forecast is possible using focused forecasting. In general, more advanced forecasting methods are used professionally except where demand is very variable. Forecasting with exponential weighting is the simplest of the professional forecasting tools. Where exponential smoothing is being introduced to an existing product, historical forecasting can be used. Historical forecasting methods are based on the mathematical manipulation of historical data.
