Improving Demand Forecasting of Spare Part Business in Multi-level Inventory System
Laukka, Mikko (2017)
Laukka, Mikko
2017
Automaatiotekniikka
Teknisten tieteiden tiedekunta - Faculty of Engineering Sciences
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Hyväksymispäivämäärä
2017-05-03
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tty-201704201311
https://urn.fi/URN:NBN:fi:tty-201704201311
Tiivistelmä
This master’s thesis studies if the Case Company’s quantitative demand forecasting process is reliable enough in the multi-level inventory system. The Case Company is selling equipment’s to mining and construction business. Its business lines are service and new machine sales. Spare parts have major role in the service business which covers over 50% of the whole company’s revenue. Company has implemented inventory control software few years ago. This has reduced inventory values significantly. Thesis studies also, if the forecasting accuracy can be improved. During the master’s thesis work many flaws from the system were observed.
The theoretical part of this study consist of literature review, which focuses on cost of inventory (Costantino, Di Gravio et al. 2013, Simchi-Levi, Kaminsky et al. 2008), service level, item categorization (Fortuin 1999, Danese and Kalchschmidt 2011), multi-level inventory system ((Hau L. Lee et al. 2004, Altay, Litteral 2011), supply chain structure (Syntetos et al. 2010), stocking policies (van Kampen, Akkerman et al. 2012) and forecasting methods (Stevenson 2014, Qingzheng et al. 2012). The case study is based on literature studies, data from inventory control system and empirical data. Empirical data was collected during the making of thesis, through several meetings and discussions with work colleagues.
Thesis findings shows that current situation in the Case Company’s processes are in rather good level. This thesis suggests that the forecasting methods in the Case Company can be improved. Improving can be made by implementing effective forecast parameters and new forecast method. Sales and operations process as qualitative method can improve the forecast accuracy in specific cases. Implementing the new parameters and methods will require further testing to be sure about the conclusions made in this thesis. Sales and operation processes implementing needs first of all creating one, but also improving the knowledge of forecasting process at all parties included.
The theoretical part of this study consist of literature review, which focuses on cost of inventory (Costantino, Di Gravio et al. 2013, Simchi-Levi, Kaminsky et al. 2008), service level, item categorization (Fortuin 1999, Danese and Kalchschmidt 2011), multi-level inventory system ((Hau L. Lee et al. 2004, Altay, Litteral 2011), supply chain structure (Syntetos et al. 2010), stocking policies (van Kampen, Akkerman et al. 2012) and forecasting methods (Stevenson 2014, Qingzheng et al. 2012). The case study is based on literature studies, data from inventory control system and empirical data. Empirical data was collected during the making of thesis, through several meetings and discussions with work colleagues.
Thesis findings shows that current situation in the Case Company’s processes are in rather good level. This thesis suggests that the forecasting methods in the Case Company can be improved. Improving can be made by implementing effective forecast parameters and new forecast method. Sales and operations process as qualitative method can improve the forecast accuracy in specific cases. Implementing the new parameters and methods will require further testing to be sure about the conclusions made in this thesis. Sales and operation processes implementing needs first of all creating one, but also improving the knowledge of forecasting process at all parties included.