Beruflich Dokumente
Kultur Dokumente
Demand
Forecasting
in a Supply Chain
PowerPoint presentation to accompany
Chopra and Meindl Supply Chain Management, 5e
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
1-1
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Learning Objectives
1. Understand the role of forecasting for both an
enterprise and a supply chain.
2. Identify the components of a demand
forecast.
3. Forecast demand in a supply chain given
historical demand data using time-series
methodologies.
4. Analyze demand forecasts to estimate
forecast error.
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Role of Forecasting
in a Supply Chain
supply chain
Used for both push and pull processes
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Characteristics of Forecasts
1. Forecasts are always inaccurate and should thus
include both the expected value of the forecast and
a measure of forecast error
2. Long-term forecasts are usually less accurate than
short-term forecasts
3. Aggregate forecasts are usually more accurate than
disaggregate forecasts
4. In general, the farther up the supply chain a
company is, the greater is the distortion of
information it receives
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Past demand
Lead time of product replenishment
Planned advertising or marketing efforts
Planned price discounts
State of the economy
Actions that competitors have taken
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2. Time Series
Use historical demand only
Best with stable demand
3. Causal
Relationship between demand and some other
factor
4. Simulation
Imitate consumer choices that give rise to
demand
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Components of an Observation
Observed demand (O) = systematic component (S)
+ random component (R)
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Basic Approach
1. Understand the objective of forecasting.
2. Integrate demand planning and forecasting
throughout the supply chain.
3. Identify the major factors that influence the
demand forecast.
4. Forecast at the appropriate level of
aggregation.
5. Establish performance and error measures
for the forecast.
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
7-8
Multiplicative
S = level x trend x seasonal factor
Additive
S = level + trend + seasonal factor
Mixed
S = (level + trend) x seasonal factor
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Static Methods
Systematic component (level trend) seasonal factor
Ftl [L (t l)T]Stl
where
L
T
St
Dt
Ft
=
=
=
=
=
estimate of level at t = 0
estimate of trend
estimate of seasonal factor for Period t
actual demand observed in Period t
forecast of demand for Period t
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Tahoe Salt
Year
Quarter
Period, t
Demand, Dt
8,000
13,000
23,000
34,000
10,000
18,000
23,000
38,000
12,000
10
13,000
11
32,000
12
41,000
Table 7-1
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Tahoe Salt
Figure 7-1
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t1( p/2)
D
Dt( p/2) 2Di / (2 p) for p even
t( p/2)
it1( p/2)
Dt
t[( p1)/2]
it[( p1)/2]
Di / p for p odd
t1( p/2)
it1( p/2)
4
( D1 D5 2 Di ) / 8
i 2
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Tahoe Salt
Figure 7-2
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
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Tahoe Salt
Figure 7-3
Dt L Tt
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7-15
Figure 7-4
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
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jp1
Si
j0
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Adaptive Forecasting
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Adaptive Forecasting
Ft1 (Lt lTt )St1
where
Lt
Tt
Dt
Et
St
Ft
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Forecast
Estimate error
Modify estimates
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Moving Average
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Revised demand
L5 = (D5 + D4 + D3 + D2)/4
= (125 + 122 + 114 + 127)/4 = 122
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1 n
L0 Di
n i1
Current forecast
Revised forecast
using smoothing
constant 0 < < 1
Thus
Lt1 (1 ) n Dt1n (1 )t D1
n0
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Supermarket data
4
L0 Di / 4 120.75
i1
F1 L0 120.75
E1 = F1 D1 = 120.75 120 = 0.75
L1 D1 (1 )L0
0.1120 0.9 120.75 120.68
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
7-26
7-27
T0 = a, L0 = b
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Revised estimate
L1 = D1 + (1 )(L0 + T0)
= 0.1 x 8,415 + 0.9 x 8,040 = 8,078
T1 = (L1 L0) + (1 )T0
= 0.2 x (8,078 7,367) + 0.8 x 673 = 681
With new L1
F2 = L1 + T1 = 8,078 + 681 = 8,759
Continuing
F7 = L6 + T6 = 11,399 + 673 = 12,072
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Winters Model
L0 = 18,439 T0 = 524
S1= 0.47, S2 = 0.68, S3 = 1.17, S4 = 1.67
F1 = (L0 + T0)S1 = (18,439 + 524)(0.47) = 8,913
The observed demand for Period 1 = D1 = 8,000
Forecast error for Period 1
= E1 = F1 D1
= 8,913 8,000 = 913
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
7-33
Winters Model
Assume = 0.1, = 0.2, = 0.1; revise estimates
for level and trend for period 1 and for seasonal
factor for Period 5
L1 = (D1/S1) + (1 )(L0 + T0)
= 0.1 x (8,000/0.47) + 0.9 x (18,439 + 524) = 18,769
T1 = (L1 L0) + (1 )T0
S5
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Applicability
Moving average
No trend or seasonality
Simple exponential
smoothing
No trend or seasonality
Holts model
Winters model
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At Et
1
Et2
n t1
MAPEn
1 n
MADn At
n t1
1.25MAD
Declining alpha
t1
Et
100
Dt
n
n
biasn Et
t1
biast
TSt
MADt
t1
1
t
t1 1 t
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Figure 7-5
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Figure 7-6
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Moving average
Simple exponential smoothing
Trend-corrected exponential
smoothing
Trend- and seasonality-corrected
exponential smoothing
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Figure 7-7
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Figure 7-8
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Figure 7-9
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Figure 7-10
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MAD
MAPE (%)
TS Range
Four-period moving
average
9,719
49
1.52 to 2.21
Simple exponential
smoothing
10,208
59
1.38 to 2.15
Holts model
8,836
52
2.15 to 2.00
Winters model
1,469
2.74 to 4.00
Table 7-2
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software
Can be used to best determine forecasting
methods for the firm and by product
categories and markets
Real time updates help firms respond
quickly to changes in marketplace
Facilitate demand planning
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Risk Management
Errors in forecasting can cause significant
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Forecasting In Practice
value
Be sure to distinguish between
demand and sales
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Printed in the United States of America.
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