The blessing and curse of inventory science is the number of different formulas and models. The blessing is that there is a model and research to support thousands of different nuances. The curse is that this confuses practitioners and companies getting started. And even worse, companies can waste time and money implementing nuanced policies that aren’t better than a simple model.
How do you take into account the last two years worth of "abnormal" peaks/valley of demand due to covid?
Wouldn't that significantly impact inventory levels?
When you say forecast error, do you mean residuals from the fit of whatever forecast model you use?