Demand Forecasting Method Based on Stochastic Processes and Its Validation Using Real-World Data

  • Yinggao ZhengEmail author
  • Hiroshi Suito
  • Hideo Kawarada
Part of the Computational Methods in Applied Sciences book series (COMPUTMETHODS, volume 15)


Demand forecasting problems frequently arise in logistics and supply chain management. The Newsboy Problem is one such problem. In this paper, we present an improved solution method using application of the Black–Scholes model incorporating stochastic processes used in financial engineering for option pricing. Through numerical experiments using real-world data, the proposed model is demonstrated to be effective.


Option Price Supply Chain Management Segment Length Wholesale Price Demand Forecast 
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Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  1. 1.Graduate School of Environmental SciencesOkayama UniversityOkayamaJapan
  2. 2.Iwaki Credit BankOnahama, IwakiJapan

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