Scribd
Upload
24 views

Demand Forecasting: A Case Study in The Food Industry

The document discusses demand forecasting methods for a food company. It describes different forecasting models and their importance for inventory management. The study evaluated combining forecasts from three models and found it reduced errors and improved reliability compared to a single model.

Uploaded by

Bai Mustapha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
24 views

Demand Forecasting: A Case Study in The Food Industry

The document discusses demand forecasting methods for a food company. It describes different forecasting models and their importance for inventory management. The study evaluated combining forecasts from three models and found it reduced errors and improved reliability compared to a single model.

Uploaded by

Bai Mustapha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Demand Forecasting: A Case Study

in the Food Industry


Submitted by: Mustapha, Baiummayah B.

I. INTRODUCTION

Forecasting methodologies play a vital role in the business world because they help with both operational and strategic
decision-making in which these are one of the keys for a business to be successful. Also, demand forecasting is a significant
task in the business since it may show market trends and help the organization plan its long-term strategy. PR Company has
been in the industry for more than half a century, and it is now considered successful in the manufacture and sale of delicatessen.
From its inception to the present, PR managed to improved and developed into a modern enterprise consist of experienced
professionals and cutting-edge technology, allowing it to foresee the problems and specificities of competitiveness and
globalization while remaining loyal to its Portuguese roots. Moreover, the strategy of the company is simply to maintain steady
business growth while constantly ensuring a high level of customer satisfaction by prioritizing quality and safety. On the other
hand, the study is implemented for the development of the utilization of demand forecasting model in the food industry,
specially in the delicatessen market and for the PR company. The researchers merged the three distinct sets of forecasts
provided where the company's 4-week moving average, the exponential smoothing, and the ARIMA models generated using
simple average, and evaluated the results of these combined forecasts to forecasts achieved using the company's model. The
MAD was reduced by 22% (from 11 826 to 9219), the MAPE by 21%, and the MSE by 27% as a result of the combined
forecasts.

II. DISCUSSION

Accurate sales projections have the capability to increase profits, improve efficiency, and reduce waste in the
supply chain. Moreover, different demand forecasting models for food company products are described in this
research. A good inventory management strategy in the food industry comprises a large number of publications,
each with its own unique features, such as quality and freshness. Excess stock losses can be severe if you make
poor selections in this area.
III. CONCLUSION

In the study I learned that forecasting plays an increasingly significant part in supply chain management as
organizations become more competitive, and an industry's viability is often based on the exactness of forecasts. Demand
projections are basically the heart of all strategic and planning activities in the retail industry, as they have a significant effect
on the financial and competitiveness. Also, its significance grows exponentially as the results are used for a variety of functional
departments such as they encourage the finance team to approximate costs, levels of profit, and capital requirements, they
permit the sales team to gain knowledge of each item's overall sales, the purchasing department strategizes short- and long-
term investments of the company, and the marketing department is the one who plans their activities and analyzes the effect of
various marketing strategies on total sales. With this, we can say that forecasts are so widely agreed to be very beneficial for
most businesses and industries. Effective inventory forecasts have the potential to boost productivity, improve efficiency, and
reduce waste in the supply chain. However, the researchers utilized simple average to merge three different given methods of
forecasts in the study which are the 4-week moving average used by the company, exponential smoothing and the ARIMA
models developed. The reliability of these forecasts has been found to improve considerably when they are combined. Merging
methods can be employed with low cost increase if simple approaches to combining are applied. As a result, researchers
consider that the simple average of the forecasts generated by the three alternative models may give a reasonable approach for
this forecasting problem due to its simplicity and efficiency.

You might also like