Demand & Inventory Management
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 means that the forecast provided by the overseas office has a long lead time and it is not accurate because of dynamic changes such as the global economic conditions and customer taste. In real life, demand is characterised by dynamic structural change. This paper investigates the problem of an inventory control system in a high technology batch production environment. The major characteristics of the problem are: . There is some standardization of products and there are repeated orders for these standard products. . There is some specialized customization of the products, but this forms a small portion of the total workload of the company. . The market uncertainty faced by the batch production environment are: the quantity needed to be produced; and the timing of the customer orders. . There is a lead time between a placement of a purchase order of parts and materials from outside supplier and the delivery date of the parts and materials. The lead time of the parts and materials can be as long as half a year. . There is a lead time between a customer placing an order and the delivery of the products.
The current issue and full text archive of this journal is available at http://www.emerald-library.com
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Abstract
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 means that the forecast provided by the overseas office has a long lead time and it is not accurate because of dynamic changes such as the global economic conditions and customer taste. In real life, demand is characterised by dynamic structural change. This paper investigates the problem of an inventory control system in a high technology batch production environment. The major characteristics of the problem are: . There is some standardization of products and there are repeated orders for these standard products. . There is some specialized customization of the products, but this forms a small portion of the total workload of the company. . The market uncertainty faced by the batch production environment are: the quantity needed to be produced; and the timing of the customer orders. . There is a lead time between a placement of a purchase order of parts and materials from outside supplier and the delivery date of the parts and materials. The lead time of the parts and materials can be as long as half a year. . There is a lead time between a customer placing an order and the delivery of the products.
The current issue and full text archive of this journal is available at http://www.emerald-library.com
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.
Abstract
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