2 Forecasting logistics requirements - Wiley · 2 Forecasting logistics requirements Case study:...

2 Forecasting logistics requirements2.1 Introduction2.2 Qualitative methods2.3 Quantitative methods2.4 Data preprocessing2.5 Choice of the forecasting method2.6 Advanced forecasting method2.7 Accuracy measure and forecasting monitoring2.8 Interval forecasts2.9 Case study: Forecasting methods at Adriatica

Accumulatori2.10 Case study: Sales forecasting at Orlea2.11 Questions and problems

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 1 / 8

2 Forecasting logistics requirements Case study: Forecasting methods at Adriatica Accumulatori

Adriatica Accumulatori (1/2)

- Electromechanical firm headquartered in Termoli, Italy,manufacturing car spare parts for the Italian market;

- during 1999–2008 decade:> car battery sales constantly increased;> progressive loss of market share (see Table 1).

Year Italian market Adriatica Accumulatori Adriatica Accumulatorisales sales market share (%)

1999 693 326 138 665 202000 803 666 152 696 192001 947 243 170 503 182002 1 136 433 193 192 172003 1 406 432 210 964 152004 1 666 011 233 241 142005 1 869 683 243 058 132006 2 136 463 256 375 122007 2 316 402 266 386 112008 2 507 929 275 872 11

Table 1: Number of spare batteries sold.

Time series extrapolation technique

- Until 2008, production and marketing plans based on salesforecasts;

- time series extrapolation technique, applied to the datashown in Table 1:

p10(τ)= 285875.06+15951.08τ,τ= 1,2, . . . ;

- demand forecasts:> 301826 units in 2009 (τ= 1) (with a 9.4% increase with

respect to 2008);> 317777 units in 2010 (τ= 12) (with a 15.2% increase

with respect to 2008).

p10(τ)= 285875.06+15951.08τ,τ= 1,2, . . . ;

Company management decisions

- During 1999–2008 decade, Adriatica Accumulatori had lostan opportunity to sell more;

- decision to predict sales by:> first estimating the Italian market demand;> then evaluating different scenarios corresponding to

the current market share and increased sharesachievable through appropriate marketing initiatives.

Causal method (1/2)

- Time series of national battery sales correlated to thenumber of cars sold two years before (see Table 2);

- Italian demand of spare batteries was forecast for the years2009 and 2010 (2396003 and 2676295 units, respectively);

- company management generated several scenarios basedon different market shares;

> in case where the firm maintained a market shareequal to 11%:demand equal to 263560 units in 2009 (with a 4.5%increase with respect to 2008);demand equal to 294392 units in 2010 (with a 6.7%increase with respect to 2008).

Causal method (1/2)

Causal method (2/2)

Year Number Year Number

1997 253 321 2003 886 2971998 381 385 2004 1 014 9751999 491 755 2005 1 162 2462000 634 706 2006 1 167 6142001 951 704 2007 1 217 9292002 830 175 2008 1 363 594

Table 2: Car sales in Italy over 10 years.

Conclusions

- The two forecasting methods provided different results;- the company decided to better analyse the logic underlying

the two approaches;- Italian economy was undergoing a period of quick and

dramatic change;- the latter method was deemed to provide more accurate

predictions than the former (more suitable when the pastdemand pattern is likely to be replicated in the future).

Conclusions

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