School Of Business
PROJECT REPORT
“ANALYSIS AND PREDICTION OF SHIPMENT LOAD IN
FESTIVE SEASONS”.
IN
SAFEXPRESS AMBALA
For The Partial Fulfillment of the Requirement for the Degree Of
“MASTER OF BUSINESS AND ADMINISTRATION”
SUBMITTED TO:
SCHOOL OF BUSINESS
ITM UNIVERSITY, GWALIOR (M.P)
SUBMITED BY:
SIDDHARTH BOLE
M.B.A (SCM) (6th tri-sem)
ROLL NO- MBAN1MG15085
2
DECLARATION
I Siddharth bole (MBAN1MG15085) student of MBA (SCM) VIth trimester, hereby
declare that I have submitted my report on “Analysis and prediction of
shipment load in festive seasons. This report is submitted by me under the
guidance of Mr. Ankit Singh, Mr. S.K.Yadav, and Prof. Somen Mitra (H.O.D) of
ITM University. I have submitted this report for the partial fulfillments of the VI th
Trimester of MBA (SCM).
SIGNATURE
Siddharth bole
(MBAN1MG15085)
3
CERTIFICATE
This is to certify that Siddharth bole (MBAN1MG15085) student of MBA
(SCM) VIth trimester has submitted his report on “Analysis and prediction
of shipment load in festive seasons. For the partial fulfillment of the VIth
trimester of MBA (SCM) and submitted a satisfactory report of the Project.
This work has not been submitted in part or full to this or any other
university for the award of any degree or diploma to the best of knowledge.
We wish them success in the future.
Signature
Prof. Somen Mitra
(H.O.D)
4
ACKNOWLEDGEMENT
Thanking is formality and sometimes a necessity, nevertheless an essential part of
any project report. The list of expression of thanks no matter how extrusive is
always in complete and inadequate. This acknowledgement is no exception.
One of the best parts of writing a project report is the opportunity to thank those
who have contributed to it. This project report has been made possible through
direct and indirect co-operation of mentors. I especially with to acknowledge the
following people who reviewed the project. Thanks for the most perspective and
helpful comments.
I sincerely thank to “Mr. Ankit Singh, Mr. S.k.Yadav” for his support and
Valuable Guidance & also express my gratitude for his precious help during the
entire training session.
5
TABLE OF CONTENTS
1. INTRODUCTION TO LOGISTICS
• Objective of study
• Scope of the study
• Meaning of logistics
• Origin and definition of logistics
• Importance of logistics management
• Logistics management and supply chain
2. BACKGROUND OF SAFEXPRESS
• The company profile
• History of SAFEXPRESS
• Mission, vision of SAFEXPRESS
• Type of business
• Service of SAFEXPRESS
.
3. ANALYSIS AND PREDICTION OF SHIPMENT LOAD IN
FESTIVE SEASONS • Research methodology • Time series analysis.
4. CONCLUSION.
5. BIBLIOGRAPHY.
7
OBJECTIVE OF THE STUDY
The objectives of the Project are: PRIMARY OBJECTIVES
● Analysis and prediction of shipment load in festive seasons.
SECONDARY OBJECTIVE
● To know about Logistics Industries
● To know whether the customers are satisfied with the existing range of service pattern.
SCOPE OF THE STUDY:
In order to understand the concepts of logistics in terms of practical usage and to glimpse
into the how a real company or organization uses logistics as a formidable tool to gain
customer satisfaction, reduce overall cost and increase efficiency I selected
“SAFEXPRESS” the India leading courier Service Company. The study is done only how
SAFEXPRESS use logistics system effectively. There are following strength and weakness of
SAFEXPRESS.
COMPANY STRENGTHS
Credit & Retail basis pricing strategy
Good brand presence in India
It has great amount of Creative Service ideas
“Largest Logistics service Provider in India” by Limca Book of Records in 2002
Has a reach to all 627 districts in 35 states and union territories in India
It has more than 3600 GPS-equipped all-weather proof, containerized vehicles
COMPANY WEAKNESSES
Marketing and advertising is lesser than global brands
Lower adoption of advanced technology
8
COMPANY OPPORTUNITIES
Diversification in more innovative services
Increasing firms in manufacturing industry
It has 3600 weather proof ISO-9002 vehicles which can be used for increasing range of
services.
COMPANY THREATS
Big competitors with advanced technology
Unorganized transportation sector
Entry and penetration of international players and domestic players
9
INTRODUCTION
MEANING OF LOGISTICS:
Logistics is concerned with getting the products and services where they are needed and when
they are desired. It is difficult to accomplish any marketing or manufacturing without logistical
support. It involves the integration of information, transportation, inventory, warehousing,
material handling, and packaging.
The operating responsibility of logistics is the geographical repositioning of raw materials, work
in process, and finished inventories where required at the lowest cost possible. Logistics is
practiced for ages since organized activity began. Without logistics support no activity can be
performed to meet defined goal. The current challenge is to perform logistics scientifically in
order to optimize benefits to the organization. Logistics is a planning function of management.
Logistics function is concerned with taking products and services where they are needed and
when they are needed.
LOGISTICS MANAGEMENTS:
Logistics management is that part of the supply chain which plans, implements and controls the
efficient, effective, forward and backward (reverse) flow and storage of goods, services and
information between the point of origin and the point of consumption in order to meet customers'
requirements rather to the customers’ delight. A professional working in the field of logistics
management is called a logistician.
Logistics, as a business concept, evolved only in the 1950s. This was mainly due to the increasing
complexity of supplying one's business with materials, and shipping out products in an
increasingly globalize supply chain, calling for experts in the field who are called Supply Chain
Logisticians. This can be defined as having the right item in the right quantity at the right time at
the right place for the right price and to the right target customers (consumer); and it is the
10
science of process having its presence in all sectors of the industry. The goal of logistics work is
to manage the fruition of project life cycles, supply chains and resultant efficiencies. Logistics is
Concerned with getting (or transmitting) the products and services where they are needed or
when they are desired. It is difficult to accomplish any marketing or manufacturing without
logistical support. It involves the integration of information, transportation, inventory,
warehousing, material handling, and packaging. The operating responsibility of logistics is the
geographical repositioning of raw materials, work in process, and finished inventories where
required at the lowest cost possible.
ORIGIN & DEFINITION OF LOGISTICS:
The term "logistics" originates from the ancient Greek "Zóyoç" ("logos"—"ratio, word,
calculation, reason, speech, oration"). Logistics is considered to have originated in the military's
need to supply themselves with arms, ammunition and rations as they moved from their base to a
forward position. In ancient Greek, Roman and Byzantine empires, there were military officers
with the title ‘Logistics’ who were responsible for financial and distribution of supplies.
The Oxford English dictionary defines logistics as: “The branch of military science having to
do with procuring, maintaining and transporting material, personnel and facilities.”
The American Council of Logistics Management defines logistics as” the process of planning,
implementing and controlling the efficient and effective flow, and storage of goods, services and
related information from the point of origin to the point of consumption for the Purpose of
conforming to customer requirements.”
IMPORTANCE OF LOGISTICS MANAGEMENTS:
Logistics is the bed rock of trade and business.
Without selling and or buying there can be no trade and business. Buying and or selling
takes place only when goods are physically moved into and or away from the market.
Take away logistical support trade and business will collapse
Integrates logistical activities
In conventional management environment, various activities of logistics work in isolation
under different management functions. Each pocket trying to sub optimizes its objectives at
the cost of overall organizational objectives. Purchasing trying to purchase at minimum
price at the cost of what is needed by operations. Operations produce large quantities at
minimum production cost ignoring demand leading to doom inventory. Logistics function
of management brings all such functions under one umbrella pulling down inter
departmental barriers.
11
Competitive edge:
In the fiercely competitive environment logistics provides the edge. Due to technological
revolution most of the products are moving into commodity markets. In a commodity
market where price is controlled by competition, where there is no product differentiation
in terms of quality parameters like performance & reliability, where brands are almost
irrelevant, competitive edge is that of availability of product and service in terms of time,
place and quantity.
Leads to customer satisfaction
Through superior customer service. Organizational objectives of P [Productivity],Q
[Quality],C [Cost],D [Delivery],E [Employee Morale],F [Flexibility],S [Safety],H
[Health],E [Environment] are set to meet customer expectations.
Supports critical functions like operations and marketing
Strong logistics support enables a company to move towards JUST IN TIME production
system for survival in a highly competitive market
LOGISTICS MANAGEMENTS AND SUPPLY CHAIN:
SCM and logistics management, the definitions made by the Council of Supply Chain
Management Professionals, CSCMP (former Council of Logistics Management, CLM)
SCM is defined as “Supply chain management encompasses the planning and
management of all activities involved in sourcing and procurement, conversion, and
all Logistics Management activities. Importantly, it also included coordination and
collaboration with channel partners, which can be suppliers, intermediaries, third-party
service providers, and customers. In essence, Supply Chain Management integrates
supply and demand management within and across companies “Supply chains
encompass the companies and the business activities needed to design RFDn, make,
deliver, and use a product or service. Businesses depend on their supply chains to
provide them with what they need to survive and thrive. Every business fits into one or
more supply chains and has a role to play in each of them. The pace of change and the
uncertainty about how markets will evolve has made it increasingly important for
companies to be aware of the supply chains they participate in and to understand the
roles that they play. Those companies that learn how to build and participate in strong
supply chains will have a substantial competitive advantage in their markets. Supply
chain management is the coordination of production, inventory, location, and
transportation among the participants in a supply chain to achieve the best mix of
responsiveness and efficiency for the market being served. There is a difference between
12
the concept of supply chain management and the traditional concept of logistics.
Logistics typically refers to activities that occur within the boundaries of a single
organization and supply chains refer to networks of companies that work together and
coordinate their actions to deliver a product to market. Also traditional logistics focuses
its attention on activities such as procurement, distribution, maintenance, and inventory
management. Supply chain management acknowledges all of traditional logistics and also
includes activities such as marketing, new product development, finance, and customer
service. In the wider view of supply chain thinking, these additional activities are now
seen as part of the work needed to fulfill customer requests. Effective supply chain
management requires simultaneous improvements in both customer service levels and
the internal operating efficiencies of the companies in the supply chain. Customer
service at its most basic level means consistently high order fill rates, high on-time
delivery rates, and a very low rate of products returned by customers for whatever
reason. Internal efficiency for organizations in a supply chain means that these
organizations get an attractive rate of return on their investments in inventory and other
assets and those they find ways to lower their operating and sales expenses.
14
COMPANY PROFILE
Safexpress have a Integrated Logistics Management. It is our 3PL Product that
optimizes your company’s supply chain. First, we examine the linkages between your
suppliers, producers, buyers, intermediaries and end users in order to identify time and
cost inefficiencies. Next, we deploy our unique mix of local know-how, global practices
and cutting-edge technology to provide integrated supply chain solutions. These range
from specific services such as warehouse management, statutory compliance and
invoicing - to an entire gamut of third party logistics services.
Safexpress works and carries on the philosophy of 'Custodians First
Carriers Later’. We sincerely abide by our corporate philosophy on the subject.
Safexpress has an all risks cover - Carrier’s Risk offer, which unburdens the customer
of his worries of losses in transit. On minimal extra charge of Risk Charges, we cover
your valuable shipment against all sorts of transit losses including fire, flood, damage,
accident, shortage, etc.
The Latest of the material handling equipment are used at Safexpress' hubs to ensure
safety and remove Laxity from material handling. Equipment including hydraulic hand
pallet trucks, dock levelers, trolleys, fork lifts’ multilevel pallet stackers are used by
Safexpress. Chain Pulleys and Cranes handle consignments which are not possible by
smaller equipment’s to man oeuvre.
It might not be out of place to mention here all the hubs of Safexpress are on platform
level height. Any Logistician will understand and appreciate the essentiality and
importance platform level warehouses have for material handling.
15
Pawan Jain
Chairman and Managing Director
Safexpress
Anil Sayal
General Manager
Safexpress
Safexpress started its business as a door-to-door service in 1995 with 4 routes, 9
offices, 12 container mounted vehicles and 20 employees.
Safexpress' door-to-door services include niche products like DOD and To-Pay
freight.
After one year i.e. in 1996 Safexpress opens super hubs at Delhi, Mumbai and
Bangalore.
Next year Safexpress launches Integrated Logistics Services. Our first ILS client is NIIT;
the first international ILS account is signed with Hilt from Europe. Spurred on by a
surging domestic economy, Safexpress extends its fleet to 250 and number of stations to
290. Safexpress Private Limited emerges as an independent entity
16
Then in 1998 Safe air and Safe box are launched, setting a new standard in value added
cargo services. All hubs are connected through web-based software. In 1999 having
grown by over 300%in 4 years without compromising quality, Safexpress is awarded the
Golden Peacock Award for quality and innovation in Logistics Management.
In 2000 Pilot run for GPS starts on 28 routes. Also Safexpress reaches the 350-
destinations mark and the fleet crosses 1400. Again 2001 Safexpress upgrades and
launches a whole lot of features on www.safexpress.com including ePod, Virtual Cargo
and Privileged Member.
In the year 2002, 2003 Safexpress was declared India's "Largest Logistics Service
Provider" by Limca Book of Records. In 2005 Safexpress bags the MICO: Power of We
Award for excellent service in logistics. In the same year Safexpress fleet crosses 3000
mark.
Next year in 2006 Safexpress was awarded by ADC Krone for providing best
logistics services and in same year Safexpress bags prestigious RAI's (Retailers
Association of India) Award for Best Logistics Service Provider.
HISTORY AND BACKGROUND OF SAFEXPRESS
1995 Safexpress launches as a door-to-door service with 4 routes, 9 offices, 12
container mounted vehicles and 20 employees.
Safexpress' door-to-door services include niche products like DOD and
To-Pay freight.
1996 Safexpress opens super hubs at Delhi, Mumbai and Bangalore.
1997 Safexpress launches Integrated Logistics Services. Our first ILS client is
NIIT, the first international ILS account is signed with Hilti from Europe.
Spurred on by a surging domestic economy, Safexpress extends its Fleet to 250
and number of stations to 290.Safexpress Private Limited emerges as an
independent entity.
1998 Safe air and Safe box are launched, setting a new standard in value added
cargo services. All hubs are connected through web-based software.
17
1999 Having grown by over 300% in 4 years without compromising quality,
Safexpress is awarded the Golden Peacock Award for quality and innovation in Logistics Management.
2000 Pilot run for GPS starts on 28 routes.
Safexpress reaches the 350-destinations mark and the fleet crosses 1400.
2001 Safexpress upgrades and launches a whole lot of features on
www.safexpress.com including ePod, Virtual Cargo and Privileged Member.
2002 Safexpress declared India’s “Largest Logistics Service
Provider”
By Limca Book of Records 2002.
2003 Safexpress declared India’s “Larges Logistics Service
Provider” by Limca Book of Records 2003.
Mr. Pawan Jain, CMD, Safexpress, becomes one of the finalists in the prestigious
Envy’s Entrepreneur of the year Award.
2004 Safexpress inaugurated its 500th scheduled delivery location Safexpress
bags the Franchise Awards04 for excellence in Team Work.
2005 Safexpress bags the MICO:Power of We Award for excellent service in
logistics
Safexpress fleet crosses 3000 mark.
2006 Safexpress awarded by ADC Krone for providing best logistics Services.
Safexpress bags prestigious RAI’s (Retailers Association of India) Award for
Best Logistics Service Provider.
MISSION, VISION & QUALITY OF SAFEXPRESS
MISSION
We shall adopt and internalize a work culture which demonstrates a "we can we will"
attitude to reflect in our daily responsibilities so as to far exceed our objectives,
consistently striving towards market dominance. We will create historical landmarks
forming a strong edifice for the future overcoming all obstacles pro-actively as our
personal responsibility and commitment to create delight for the customer with
impeccable personalized services.
18
VISION
To be a conscious learning organization maintaining flexibility for change so as to
provide the most customized solutions. Striving towards global market share whilst
maintaining dominance in the domestic market through good HR practice and
excellent customer service.
QUALITY
“A quality service relies upon constant customer interaction and feedback.
An immediate response to the changing environment with pre-defined business processes
managed effectively and efficiently leads to the highest output from the lowest input and
this is the strongest measure of quality. The best certification of a quality organization is
the measurement of the scale of the smile on the customers face”
TYPE OF BUSINESS
Indian Economic Scenario today marks the emergence of total chaotic market with lot
of competitors, piling stock of products, lowering margins, taxation changes and more.
In the present situation what is needed to see the blue?
The ‘way to higher profits’ comes from streamlining the channels and outsourcing the
segment of business which is not the core focus or expertise of the company.
One such fragment of business model is Supply Chain. Being a medium of linking
product to market, a robust model of supply chain management ensures a better ‘TAT’
(turnaround time), low inventory holding cost and less of damages.
Over the time discipline of business logistics has advanced from the warehouse and
transportation dock to the boardroom of leading Global Enterprises.
Supply Chain has to be viewed not only as material and information pipeline but as
integration of logistics with the human factors that need more attention to be paid to
understanding, creating and managing demand more effectively.
Safexpress works on the Value Chain concept using a framework for examining
linkages between suppliers, producers, buyers, intermediaries and end users.
Safexpress, India’s leading logistics company offers Integrated Logistics Management,
Express, Air, Multi-modal, Door-to-Door, time definite delivery and consultancy
services. The company also offers e-logistics and customized solutions for e-business.
19
SAFEXPRESS SERVICES
➢ EXPRESS
Safexpress service is an express service which involves movement of cargo in all-
weather proof sealed containers on feeder and express routes. The service is time definite
with a published transit schedule covering more than 550 destinations nationwide and
provides the flexibility for surface, air and multi-modal connectivity with a wide reach
associated with Indian airlines and air taxi operators such as jet airways, Sahara etc.
➢ DRAFT-ON-DELIVERY
Draft on delivery is an unparalleled value-added service wherein the seller can dispatch
goods through Safexpress to the buyer and be assured that the delivery would take place
only when the draft has been collected.
In the Safexpress DOD system pre-alerts are sent to the consignee to allow reasonable
time for the draft to be made, thus meeting the desired objective of express transit with
the amount ready for collection.
➢ ALL RISK COVER
The management of Safexpress hereby undertakes and declares that:
“The company would redeem the value of the loss in the uneventful case of any shortage
or damage to the consignment whilst in the custody of Safexpress, subject to the risk
charge having been paid by the sender or the recipient as per the company policy. The
amount corresponding to the loss as declared would be paid by the company to the
sender or the recipients as required without waiting for any request for the same.”
➢ SAFEBOX
The safe box comes in two convenient sizes of 17” x 17” x 12” and 16” x 12” x 9” easily
accommodating up to 20 & 10 kgs respectively of your cargo.
The robust design is further reinforced with internal insulation for safety of your cargo.
So you save on packaging cost and for a nominal amount it is ready for delive ry with an
auto insurance up to Rs. 5000 absolutely free of cost.
➢ SAFEAIR
To ensure that time sensitive cargo reaches the destination through a faster mode meeting
all your requirements for the time definite deliveries. Safe air connects your cargo
through airlines, Atos and uses the services for morning and evening flights to provide a
wide variety of connectivity to suit different market cutoffs.
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➢ ILM
Safexpress works on the value chain concept using a framework for examining linkages
between suppliers, producers, buyers, intermediaries & end users.
Safexpress ensures the success of the entire chain, marrying local knowhow with the
best global practices, technology & perspective
➢ CONSULTING
Safexpress offers value added services beyond physical operations in the form of
logistics consultancy covering a wide spectrum of the Indian economy.
The company plays a pivotal role in guiding diverse market segments on existing and
recommended logistics models with various simulation modules to map transactions
using historical data and providing befitting supply chain solutions.
21
Analysis and prediction of shipment load
in festive seasons.
Research methodology (Forecasting through time series analysis)
The Role of Forecasting in a Supply Chain
Demand forecasts form the basis of all supply chain planning. Consider the
push/pull view of the supply chain.
All push processes in the supply chain are performed in anticipation of
customer demand, whereas all pull processes are performed in response to
customer demand.
For push processes, a manager must plan the level of activity, be it
production, transportation, or any other planned activity. For pull processes, a
manager must plan the level of available capacity and inventory but not the
actual amount to be executed. In both instances, the first step a manager must
take is to forecast what customer demand will be.
Forecasting is a vital function and affects every significant management
decision.
Finance and accounting use forecasts as the basis for budgeting and cost
control.
Marketing relies on forecasts to make key decisions such as new product
planning and personnel compensation.
Production uses forecasts to select suppliers; determine capacity
requirements; and drive decisions about purchasing, staffing, and inventory.
22
CHARACTERISTICS OF FORECASTS
Forecasts are always inaccurate and should thus include both the expected
value of the forecast and a measure of forecast error.
Long-term forecasts are usually less accurate than short-term forecasts.
Aggregate forecasts are usually more accurate than disaggregate forecasts.
In general, the farther up the supply chain a company is (or the farther it is
from the consumer), the greater is the distortion of information it receives.
COMPONENTS OF FORECAST
Consists of two components: (a) Systematic & (b) random component.
• Systematic component consists of
(i) Level (current depersonalized demand),
(ii) Trend (growth or decline in demand),
(iii) Seasonality (predictable seasonal fluctuation in demand)
• Random component is that part of the forecast that cannot be explained by the
historical demand patterns.
Observed demand=systematic component + random component
FACTORS are related to the demand forecast: Past Demand, Lead time of
product replenishment, Planned Advertising or Marketing efforts, Planned
Price discounts, State of the Economy, Actions that competitors have taken.
23
Types of Forecasting
There are two types of forecasting methods.
1. Qualitative & 2. Quantitative
Qualitative: Qualitative forecasting methods are primarily subjective and rely
on human judgment.
Jury of executive opinion method: Involves securing opinions from a group
of expert’s on expected future sales and combining them into the estimate of
future sales.
• Quick and relatively inexpensive method.
• Applicable for finding out the forecast demand of both new as well as
existing products.
• Based on subjective judgment of experts and hence suffers from the biases
of experts.
Delphi method: Involves eliciting responses from a panel of experts and
proceeds through a series of rounds. Choose the experts to participate
24
representing a variety of knowledgeable people in different areas
Through a questionnaire (or E-mail), obtain forecasts (and any premises or
qualifications for the forecasts) from all participants
Summarize the results and redistribute them to the participants along with
appropriate new questions
Summarize again, refining forecasts and conditions, and again develop new
questions
Repeat Step 4 as necessary and distribute the final results to all participants
Causal: Causal forecasting methods assume that the demand forecast is
highly correlated with certain factors in the environment (the state of the
economy, interest rates, etc.). Causal forecasting methods find this correlation
between demand and environmental factors and use estimates of what
environmental factors will be to forecast future demand.
Simulation: Simulation forecasting methods imitate the consumer choices
that give rise to demand to arrive at a forecast. Using simulation, a firm can
combine time-series and causal methods to answer such questions as: What
will be the impact of a price promotion? What will be the impact of a
competitor opening a store nearby?
Basic Approach to Demand Forecasting
1. Understand the objective of forecasting.
2. Integrate demand planning and forecasting throughout the supply chain.
3. Identify the major factors that influence the demand forecast.
4. Forecast at the appropriate level of aggregation.
5. Establish performance and error measures for the forecast.
25
Time Series Analysis
Time series forecasting models try to predict the future based on
past data
Forecasting
Method
Amount
of
Historica
l Data
Data
Pattern
Forecast
Horizon
Simple
moving
average
6 to 12
months;
weekly
data are
often
used
Stationary
(i.e., no
trend or
seasonality
)
Short
Weighted
moving
average and
simple
exponential
smoothing
5 to 10
observati
ons
needed
to start
Stationary Short
Exponential
smoothing
with trend
5 to 10
observati
ons
needed
to start
Stationary
and trend Short
Linear
regression
10 to 20
observati
ons
Stationary,
trend, and
seasonality
Short to
medium
26
SIMPLE MOVING AVERAGE FORMULA
• It is one of the most popular methods for calculating Long Term
Trend. This method is also used for ‘Seasonal fluctuation’, ‘cyclical
fluctuation’ & ‘irregular fluctuation’. In this method we calculate the
‘Moving Average for certain Weeks.
• n
A+...+A +A +A =F n-t3-t2-t1-t
t
• Ft = Forecast for the coming period
• N = Number of periods to be averaged
• A t-1 = Actual occurrence in the past period for up to “n” periods.
27
The data has been taken from Ambala HUB
Actual Dep
Total demand in Pkg Actual Wt Chg Wt
Week1 31989 466470 513590
Week2 28844 458244 521328
Week3 31069 451192 503378
Week4 31165 450398 509632
Week5 32023 467142 529356
Week6 29810 448107 492103
Week7 39729 521330 588900
Week8 28681 426843 474916
Week9 27059 363636 401957
Week10 32912 437180 492955
Week11 31482 451169 515252
Week12 34254 470223 519742
Week13 28261 415815 464066
Week14 33275 482692 534110
Week15 34104 483214 537222
Week16 22147 334889 374323
Week17 33257 477366 522337
Week18 28685 401284 452339
Week19 37614 514268 575201
Week20 30195 445836 503775
Week21 37554 513576 581578
Week22 33901 448279 501152
Week23 25090 326238 367063
Week24 33023 455956 509682
Week25 32801 435323 487836
Week26 33781 471483 524425
Week27 38901 521869 591226
Week28 36043 509597 576829
Week29 29030 448823 505154
Week30
23933 335625 384251
Data of Ambala HUB
28
SIMPLE MOVING AVERAGE FORMULA
• n
A+...+A +A +A =F n-t3-t2-t1-t
t
Actual Dep Total demand in Pkg forecasting for 3 days)
Week 1 31989
Week2 28844
Week3 31069
Week4 31165 30634
Week5 32023 30359
Week6 29810 31419
Week7 39729 30999
Week8 28681 33854
Week9 27059 32740
Week10 32912 31823
Week11 31482 29551
Week12 34254 30484
Week13 28261 32883
Week14 33275 31332
Week15 34104 31930
Week16 22147 31880
Week17 33257 29842
Week18 28685 29836
Week19 37614 28030
Week20 30195 33185
Week21 37554 32165
Week22 33901 35121
Week23 25090 33883
Week24 33023 32182
Week25 32801 30671
Week26 33781 30305
Week27 38901 33202
Week28 36043 35161
Week29 29030 36242
Week30 23933 34658
29
In this Case we can see that forecasting demand is more smother then
actual demand.
WEIGHTED MOVING AVERAGE FORMULA
05000
1000015000200002500030000350004000045000
wee
k1
wee
k2
wee
k3
wee
k4
wee
k5
wee
k6
wee
k7
wee
k8
wee
k9
wee
k10
wee
k11
wee
k12
wee
k13
wee
k14
wee
k15
wee
k16
wee
k17
wee
k18
wee
k19
wee
k20
wee
k21
wee
k22
wee
k23
wee
k24
wee
k25
wee
k26
wee
k27
wee
k28
wee
k29
wee
k30
comparision b/w actual demand and forcasted demand
Total demand in Pkg forcasting for 3 weeks)
While the moving average formula implies an equal
weight being placed on each value that is being averaged, the weighted moving average permits an
unequal weighting on prior time periods
30
The formula for the moving average is:
n-tn3-t32-t21-t1t Aw+...+Aw+A w+A w=F
wt. = weight given to time period “t” occurrence (weights must add to
one) 1=w
n
1=i
i
And I have assumed the weight because it was not mentioned in the Data.
assumed Weight:
t-1 0.5
t-2 0.3
t-3 0.2
31
weighted moving Average method
Actual Dep Total demand in Pkg forecast 3 weeks
week1 31989
week2 28844
week3 31069
week4 31165
week5 32023 30672
week6 29810 31575
week7 39729 30745
week8 28681 35212
week9 27059 32221
week10 32912 30080
week11 31482 30310
week12 34254 31026
week13 28261 33154
week14 33275 30703
week15 34104 31967
week16 22147 32687
week17 33257 27960
week18 28685 30093
week19 37614 28749
week20 30195 34064
week21 37554 32119
week22 33901 35358
week23 25090 34256
week24 33023 30226
week25 32801 30819
week26 33781 31325
week27 38901 33335
week28 36043 36145
week29 29030 36448
week30 23933 33108
32
In this total demand is less smother then the forecasted demand but it is
less smother then the simple moving average method.
EXPONENTIAL SMOOTHING MODEL
constant smoothing Alpha
period epast t tim in the occurance ActualA
period past time 1in alueForecast vF
period t timecoming for the lueForcast vaF
:Where
1-t
1-t
t
Premise: The most recent observations might have the highest predictive value
Therefore, we should give more weight to the more recent time periods when
forecasting
0
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weighted moving Average method Total demand in Pkg
weighted moving Average method forecast 3 weeks
33
Exponential
Smoothing
Model
Ft=Ft-1+α(At-1 -Ft-1) F1=D1
forecast 3 weeks α=.1 α=.6
Actual Dep Total demand in Pkg
0.1 0.6
f1 week1 31989
31989 31989
f2 week2 28844
31989 31989
f3 week3 31069
31675 30102
f4 week4 31165
31614 30682
f5 week5 32023 30672 31569 30972
f6 week6 29810 31575 31614 31603
f7 week7 39729 30745 31434 30527
f8 week8 28681 35212 32264 36048
f9 week9 27059 32221 31905 31628
f10 week10 32912 30080 31421 28887
f11 week11 31482 30310 31570 31302
f12 week12 34254 31026 31561 31410
f13 week13 28261 33154 31830 33116
f14 week14 33275 30703 31473 30203
f15 week15 34104 31967 31654 32046
f16 week16 22147 32687 31899 33281
f17 week17 33257 27960 30923 26601
f18 week18 28685 30093 31157 30594
f19 week19 37614 28749 30910 29449
f20 week20 30195 34064 31580 34348
f21 week21 37554 32119 31442 31856
f22 week22 33901 35358 32053 35275
f23 week23 25090 34256 32238 34451
f24 week24 33023 30226 31523 28834
f25 week25 32801 30819 31673 31347
f26 week26 33781 31325 31786 32220
f27 week27 38901 33335 31985 33156
f28 week28 36043 36145 32677 36603
f29 week29 29030 36448 33013 36267
f30 week30 23933 33108 32615 31925
34
In this given the weekly demand data, what are the exponential smoothing
forecasts for periods 2-10 using α=0.10 and α=0.60?
Assume F1=D1
I have taken forecast for 3 weeks
0
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1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031
Chart Title
α=.1 α=.6
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1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031
Chart Title
forecast 3 weeks α=.1 α=.6
35
THE MAD STATISTIC TO DETERMINE FORECASTING ERROR
n
F-A
=MAD
n
1=t
tt
MAD 1.25 deviation standard 1
deviation standard 0.8 MAD 1
The ideal MAD is zero which would mean there is no forecasting
error
The larger the MAD, the less the accurate the resulting model
37
MAD PROBLEM DATA
Actual Dep Total demand in Pkg
forecast 3 weeks Abs error
week1 31989
…..
week2 28844
…..
week3 31069
…..
week4 31165 30586 -580
week5 32023 30672 -1351
week6 29810 31575 1765
week7 39729 30745 -8984
week8 28681 35212 6531
week9 27059 32221 5162
week10 32912 30080 -2832
week11 31482 30310 -1172
week12 34254 31026 -3228
week13 28261 33154 4893
week14 33275 30703 -2572
week15 34104 31967 -2137
week16 22147 32687 10540
week17 33257 27960 -5297
week18 28685 30093 1408
week19 37614 28749 -8865
week20 30195 34064 3869
week21 37554 32119 -5435
week22 33901 35358 1457
week23 25090 34256 9166
week24 33023 30226 -2797
week25 32801 30819 -1982
week26 33781 31325 -2456
week27 38901 33335 -5566
week28 36043 36145 102
week29 29030 36448 7418
week30 23933 33108 9175
total 116740
MAD 3891
38
SIMPLE LINEAR REGRESSION MODEL
Yt is the regressed forecast value or dependent variable in the model, a is the intercept value of the regression line, and b is similar to the slope of the regression line. However, since it is calculated with the variability of the data in mind, its formulation is not as straight forward as our usual notion of slope.
39
SIMPLE LINEAR REGRESSION FORMULAS FOR CALCULATING “A” AND “B”
22 )xn(-x
)x)(yn(-xy=b
xb-y=a
Actual Dep weeks week*week Sales week*sales
1 week1 1 31989 31989
2 week2 4 28844 57688
3 week3 9 31069 93207
4 week4 16 31165 124660
5 week5 25 32023 160115
6 week6 36 29810 178860
7 week7 49 39729 278103
8 week8 64 28681 229448
9 week9 81 27059 243531
10 week10 100 32912 329120
5.5
385 31328.1 1726721
average
sum average sum
22 )xn(-x
)x)(yn(-xy=b =1721970.557
=xb-y=a -9439509.964
40
THE ROLE OF IT IN FORECASTING
there is a natural role for it in forecasting, given the large amount of data involved, the frequency with which forecasting is performed, and the importance of getting the highest quality results possible. the forecasting module within a supply chain it system, often called the demand planning module
Forecasting modules are available from all the major supply chain software companies, including the ERP firms such as sap and oracle. a number of statistical analysis software firms, such as SAS and SPSS, have programs that can be used for forecasting
0
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1 2 3 4 5 6 7 8 9 10
Chart Title
sales week*sales(forecast)
41
COLLABORATIVE PLANNING, FORECASTING, AND
REPLENISHMENT (CPFR)
A web-based process used to coordinate the efforts of a supply chain. Demand forecasting
Production and purchasing Inventory replenishment
Integrates all members of a supply chain – manufacturers, distributors, and retailers.
Depends upon the exchange of internal information to provide a more
reliable view of demand.
CPFR STEPS
Creation of a front-end
partnership agreement
Joint business planning
Development of demand forecasts
Sharing forecasts
Inventory replenishment
43
CONCLUSION AND FUTURE WORK
India’s transportation and logistics sector faces a severe shortage of skilled
manpower, and this is especially critical in the case of integrated logistics
providers. The data of Ambala hub have shown the result, in that 120 truck
daily dispatch use to take place at time of ordinary season and at the time of
festive like Diwali, Holi, new year etc.… season 250 truck dispatch take
place and there are lot of improvement required in term of quality,
technology, method, machine because at the time of festive season the
worker are having more pressure regarding fast delivery and at loading-
unloading, so they do not focuses on handling material carefully they don’t
even read the instruction mentioned on the box due to that they cause damage
to the material and increase customer compliant.
Today we are essentially operating in a global market. In this era of
crumbling economic barriers, the customer reigns supreme. The successful
enterprises in this fiercely competitive economy are those which are able to
ensure a high level of customer satisfaction and at a considerably low cost.
The focus today is not on meeting the customer’s expectations, but on
exceeding them. The strategic role of logistics and supply chain
management in this regard becomes vital.
44
To achieve the objectives of logistic and supply chain management, it is
essential to have a well-defined organizational structure that supports the
corporate mission and improves and influence logistics system performance.
With the growing nature and scope of logistics and supply chain
management in the overall performance of the enterprise over the years,
there have been changes in the logistics organizational structure from being
a part of various functions like manufacturing, finance, and marketing to a
core function.
While designing a logistics organizational structure, firms need to follow
certain principles of organization, like unity of command, span of control,
authority and responsibility, line and staff relationships, centralization and
decentralization of power etc.
45
BIBLIOGRAPHY
• The data has been taken from AMBALA HUB. • www.google.com
• www.safexpress.com
• www.logisticworld.com
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