Abstract
Demand forecasting is essential for business processes and firm’s profitability. A Good demand forecasting requires the expertise and reliability of the planning staff. The research is a case study in a transformer manufacturer in Indonesia, which planned to apply forecasting process and suitable tools for their products. The study demonstrated a systematic step required in forecasting the four studied products. For each product, 6 forecast models were evaluated and the best model was selected by optimizing forecast parameters which give the least forecast errors. The chosen forecasting model is a simple model but fairly complete in forecasting evaluation, to accommodate both trend and seasonal possibility in product forecasting. The study offers the basis for the company to establish forecasting processes and tools for its products. It also recommended the studied company to perform and monitor its forecasting process for continuous improvement to its business process.
Highlights
Accurate demand forecast is essential in industries, since it directly related to financial performance of the company
Demand forecasting is a process of predicting the future state of events which unknown, can be predicted
In a nutshell, forecasting activity is an essential element for company in making its business planning, decision and strategy (Mancuso & Werner, 2013)
Summary
Accurate demand forecast is essential in industries, since it directly related to financial performance of the company. Demand forecasting is a process of predicting the future state of events which unknown, can be predicted. In a nutshell, forecasting activity is an essential element for company in making its business planning, decision and strategy (Mancuso & Werner, 2013). There are three main areas in demand process, namely demand planning, demand forecasting and demand management. Demand planning is a multiple steps operational supply chain management process used to create the reliable forecast. Demand forecasting is a prediction, projection into the future activity, event or occurrence. Demand management is an emerging topic in supply chain management. It is focused on a fast and adequate integration of supplier needs to balance and strategically align demand with operational capability in the supply chain
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