Some Observations on The Construction of LEID's

This paper describes procedures for utilizing historical and measurement propagation data to obtain variances and LEID's on inventory differences under a variety of data base options and assumptions. The quality of an estimate is graded in terms of the information base available to the user and facilitates initial estimates based solely on selected historical inventory differences without knowledge as to the actual measurement error propagated variances and covariances. An example demonstrates the method.