FORECASTING THE FAILURE OF COMPONENT PARTS IN COMPUTER-SYSTEMS - A CASE-STUDY

This paper is an applied study in forecasting the failure of component parts in computer systems to aid in production planning and inventory control. The aim is to develop a reasonably simple forecasting system that can be operated by managers rather than statisticians. Monthly f ailures of components are shown to be related to cumulative shipments from the factory after a time lag of several months. This relationship is modelled using discounted-least-squares regression, a methodology that appears to be rare in practice. Simulated forecast accuracy is th en compared with two alternatives, exponential smoothing and a combina tion of regression and smoothing forecasts. Discounted regression prov es to be the most accurate and is therefore implemented.