JOINT EFFECT OF FORECASTING AND LOT-SIZING METHOD ON COST MINIMIZATION OBJECTIVE OF A MANUFACTURER: A CASE STUDY

Jack OLESEN

subrata.scm@gmai.com
Aalborg University, Department of Materials and Production, , DK 9220, Aalborg East (Denmark)

Carl-Emil Houmøller PEDERSEN


*Aalborg University, Department of Materials and Production, DK 9220, Aalborg East (Denmark)

Markus Germann KNUDSEN


Aalborg University, Department of Materials and Production, , DK 9220, Aalborg East (Denmark)

Sandra TOFT


Aalborg University, Department of Materials and Production, DK 9220, Aalborg East (Denmark)

Vladimir NEDBAILO


Aalborg University, Department of Materials and Production, DK 9220, Aalborg East (Denmark)

Johan PRISAK


Production Manager, Fibertex Personal Care Group, Aalborg (Denmark)

Izabela Ewa NIELSEN


Aalborg University, Department of Materials and Production, DK 9220, Aalborg East (Denmark)

Subrata SAHA


Aalborg University, Department of Materials and Production, DK 9220, Aalborg East (Denmark)

Abstract

Forecasting and lot-sizing problems are key for a variety of products manufactured in a plant of finite capacity. The plant manager needs to put special emphasis on the way of selecting the right forecasting methods with a higher level of accuracy and to conduct procurement planning based on specific lot-sizing methods and associated rolling horizon. The study is conducted using real case data form the Fibertex Personal Care, and has evaluated the joint influence of forecasting procedures such as ARIMA, exponential smoothing methods; and deterministic lot-sizing methods such as the Wagner-Whitin method, modified Silver-Meal heuristic to draw insights on the effect of the appropriate method selection on minimization of operational cost. The objective is to explore their joint effect on the cost minimization goal. It is found that a proficient selection process has a considerable impact on performance. The proposed method can help a manager to save substantial operational costs.


Keywords:

Forecasting, ARIMA, Inventory management, Lot-sizing, Economies-of-scale, Production planning, Heuristic

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Published
2020-12-30

Cited by

OLESEN, J. ., PEDERSEN, C.-E. H. ., KNUDSEN, M. G. ., TOFT, S. ., NEDBAILO, V., PRISAK, J. ., … SAHA, S. . (2020). JOINT EFFECT OF FORECASTING AND LOT-SIZING METHOD ON COST MINIMIZATION OBJECTIVE OF A MANUFACTURER: A CASE STUDY. Applied Computer Science, 16(4), 21–36. https://doi.org/10.23743/acs-2020-26

Authors

Jack OLESEN 
subrata.scm@gmai.com
Aalborg University, Department of Materials and Production, , DK 9220, Aalborg East Denmark

Authors

Carl-Emil Houmøller PEDERSEN 

*Aalborg University, Department of Materials and Production, DK 9220, Aalborg East Denmark

Authors

Markus Germann KNUDSEN 

Aalborg University, Department of Materials and Production, , DK 9220, Aalborg East Denmark

Authors

Sandra TOFT 

Aalborg University, Department of Materials and Production, DK 9220, Aalborg East Denmark

Authors

Vladimir NEDBAILO 

Aalborg University, Department of Materials and Production, DK 9220, Aalborg East Denmark

Authors

Johan PRISAK 

Production Manager, Fibertex Personal Care Group, Aalborg Denmark

Authors

Izabela Ewa NIELSEN 

Aalborg University, Department of Materials and Production, DK 9220, Aalborg East Denmark

Authors

Subrata SAHA 

Aalborg University, Department of Materials and Production, DK 9220, Aalborg East Denmark

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