Implementation of a demand planning system using advance order information

In times of demand shocks, when quantitative forecasting based on historical time series becomes obsolete, the only information about future demand is “advance demand information”, i.e. interpreting early customer bookings as an indicator of not yet known demand. This paper deals with a forecasting...

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Bibliographic Details
Published in:International journal of production economics 2010-12, Vol.128 (2), p.518-526
Main Authors: Haberleitner, Helmut, Meyr, Herbert, Taudes, Alfred
Format: Article
Language:English
Subjects:
Demand
Demand forecasting
Demand forecasting Supply chain management Industrial application Software integration
Economics
Forecasting
Forecasting techniques
Indicators
Industrial application
Marketing
Mathematical models
Operations research
Optimization
Reservation systems
Software integration
Studies
Supply chain management
Time series
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Summary:In times of demand shocks, when quantitative forecasting based on historical time series becomes obsolete, the only information about future demand is “advance demand information”, i.e. interpreting early customer bookings as an indicator of not yet known demand. This paper deals with a forecasting method which selects the optimal forecasting model type and the level of integration of advance demand information, depending on the patterns of the particular time series. This constitutes the applicability of the procedure within an industrial application where a large number of time series is automatically forecasted in a flexible and data-driven way. The architecture of such a planning system is explained and using real-world data from a make-to-order industry it is shown that the system is flexible enough to cover different demand patterns and is well-suited to forecast demand shocks.
ISSN:0925-5273
1873-7579
DOI:10.1016/j.ijpe.2010.07.003