Demand & Inventory Management Essay

Words: 5020
Pages: 21
Open Document
Forecasting demand and inventory management using Bayesian time series

T.A. Spedding University of Greenwich, Chatham Maritime, Kent, UK K.K. Chan Nanyang Technological University, Singapore

Batch production, Demand, Forecasting, Inventory management, Bayesian statistics, Time series

Keywords

Introduction
A typical scenario in a manufacturing company in Singapore is one in which all the strategic decisions, including forecasting of future demand, are provided by an overseas office. The forecast model provided by the overseas office is often inaccurate because the forecasting is performed before the actual production schedule and it is based on marketing survey results and historical data from an overseas research team. This …show more content…
To illustrate the demand forecasting techniques, a case study of a manufacturing company is presented in the paper. Three different forecasting models with three different sets of data (the first 24 weeks, the first 36 weeks and the complete 51 weeks data) are built using Bayesian dynamics time series and forecasting and ARIMA techniques. The three different sets of data are used to investigate the dynamic behaviour and structural change of the system. From the modelling results, a comparative study of the models' accuracy is performed. The strengths and weaknesses of the Bayesian time series analysis (BATS) models are also discussed and compared to the ARIMA model.

The Bayesian dynamic linear time series model
Traditional forecasting approaches are based on characterising the structure of historical time series and then predicts future events based on that structure. Obviously, the structure of the time series may change in a volatile business environment. The parameters of the time series model would then need to be re-estimated based on the new structure of the time series. Bayesian Forecasting, however, is based on the principle that routine forecasts can be updated by subjective intervention as external information becomes available. In this context ``Bayesian learning'' is particularly relevant to applications in a dynamically changing environment. Bayesian dynamic time
Show More

Related Documents: Demand & Inventory Management Essay

Importance Of Inventory Management

1. Introduction to managing inventory Inventory is defined as assets that are intended for sale and service. The objective of inventory management is to meet customer needs while keeping inventory costs at reasonable level to produce a profit for the firm (Mercado, 2007). It usually involves stock replenish time and quantity of orders between customer demand and the amount of inventory they keep. It has also strike to control tight inventory level together with its associated cost ; holding costs…

Words 1113 - Pages 5

Essay on cheating for SCM

Chain Management (SCM)?SCM encompasses the planning & management of all activities through which products and services are created and distributed to customers. Such activities include sourcing and procurement, manufacturing/operations, as well as warehousing, logistics and transportation. Importantly, it also includes coordination and collaboration with channel partners including suppliers, intermediaries, third-party service providers and customers. In essence, SCM integrates supply and demand management…

Words 1790 - Pages 8

Essay on Supply Chain Performance

INFORMATION & INVENTORY SUPPLY CHAIN PERFORMANCE INTRODUCTION • Demand, supply uncertainty and safety inventory • Information sharing in inventory • Information centralization in inventory management • Amazon.com case 1 Demand , supply uncertainty and safety inventory • Demand uncertainty results from the seasonality factors, the fluctuation as well as forecast errors • Supply uncertainty are caused by any variability existing in the transportation and production processes • There…

Words 376 - Pages 2

Southwest Airlines Case Study Chp. 8 Essay

in 72 airports. Being one of the largest low-far, high-frequency, point-to-point airline in the world, inventory management is top priority. With their unique corporate structure is crucial that they have a system in place to help ensure that all airline parts are readily available when an aircraft needs repairing. Being that Southwest prides itself in customer service, inventory management is crucial in order to make sure they are able to repair an aircraft quickly and ensure that their passengers…

Words 630 - Pages 3

Essay on Hp Case Report - Operations Management

HP Case Report 1. Causes for the Inventory Problem: HP was used to guarantee maximum order fill without putting major attention to stock level. The inventory problem was raised from a corporate order that business needed to meet customer needs with less inventory quantities. In fact, the situation was increasingly deteriorating due to the growing sales in European and Asian-Pacific, resulting in increased inventory levels to ensure satisfactory product availability. From our point of view, the main…

Words 2800 - Pages 12

Sunset Growers Cultivates Its Supply Chain Essay

day. It is the global market leader of prunes. Like any other company, Sunsweet has issues with its supply chain management. Some of the constraints faced by the company are as follows: * Single limited source of supply * Supply and demand beyond company’s control; supply determined by the weather whereas the market influences the demand side * Anticipated increase in demand during festive seasons was difficult to manage * Packaging of goods for international market was…

Words 1281 - Pages 6

In-Depth Analysis Of Inventory Management

This is an in-depth analysis of inventory management systems and practices of the MIAMI EXPORT (PVT) LIMITED. The report has been prepared based on the interview conducted with the Stores manager of the Miami Export (Pvt) Ltd. Just-In-Time inventory control system is the inventory system that practice within the organization. Then talk about the people who involved in the inventory management process and their roles and responsibilities towards the inventory. All the audit details regarding to this…

Words 1435 - Pages 6

Blood Platelet Bank Essay

generally not released to inventory until 24 hours after the collection time. Therefore, usable platelet shelf life is generally five days. This is an extremely short product shelf life compared to other blood products. This makes inventory management of platelets…

Words 3372 - Pages 14

Study Guide Essay

or delays in shipment (there are exceptions) * Reasonable dispatch * Freight not accepted stored at owner’s cost * Single most important transportation document * “Recipe” Objectives of Warehouse layout design: * Develop a demand forecast * Determine each item’s order quantity * Convert units into footage requirements * Allow for growth * Allow for adequate aisle space for materials handling equipment * Provide for the transportation interface * Provide…

Words 1226 - Pages 5

Simulation For Multi Echelon Inventory System

Simulation for Multi Echelon Inventory System 1. Background: A supply chain system is a network that mediates the flow of entities involved in a product life cycle from production to vending. Such a network consists of nodes and arcs. Nodes represent suppliers, manufacturers, distributors and vendors (e.g. retail stores) as well as their inventory facilities for storing products and transportation facilities for shipping them among nodes. Arcs represent routes connecting the nodes along which…

Words 795 - Pages 4