Initial supply and re-order level of new service parts

When a new product is introduced to the market, it may be necessary to estimate in advance the demand for service parts. Historical demand data are by definition lacking, so that standard forecasting techniques cannot be applied. In this paper we present a case study in which the failure rate of the parts and the number of end products in operation were used to estimate the demand and the re-order level during the first few months. Both the applied theoretical model and a few practical results have been included, whereby it is assumed that the number of products in operation grows linearly.