Forecasting and Inventory Management: Bridging the Gap

Lead Research Organisation: University of Salford
Department Name: Unlisted

Abstract

The aim of this project is to bring together the strengths of statistical and judgemental forecasting with the complementary benefits of System Dynamics (SD), to initiate a new research agenda for inventory modelling. Currently, the Operational Research (OR) and Industrial Engineering (IE) disciplines are very fragmented, as shown by the different conferences (and corresponding audiences) organized by different societies (eg, SD, Forecasting, Inventories Research) that in turn produce different journals, with inadequate cross-referencing. Consequently, these sub-disciplines have grown into disciplines in their own right, prohibiting a constructive exchange of ideas for the benefit of solving problems of common interest. There is great scope for the cross-utilization of the modelling approaches employed by these disciplines, to develop more effective computerized solutions and to educate modellers and decision-makers. In particular, it is viewed as imperative to bring together their complementary strengths in order to solve complex inventory problems, an example of which is the 'Bullwhip effect' (i.e. of magnifying inventories as we move backwards in a supply chain). These complex problems demonstrate the industrial importance of inventory management and the considerable benefit that their solution may offer to modern organizations. Such a solution necessitates novel inter-disciplinary approaches to problem formulation and modelling and this is the first proposal to provide them. Complex issues related to the interactions between statistical demand forecasting and stock control are currently being addressed in the first grant EP/D062942/1 EPSRC project led by Aris Syntetos. The enhancement of the current research portfolio will occur through the explicit consideration of SD and judgemental forecasting.

Publications

10 25 50
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Boylan J E (2008) Qualitative System Dynamics and the bullwhip effect in 26th International Conference of the System Dynamics Society

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Strijbosch L (2011) On the interaction between forecasting and stock control: The case of non-stationary demand in International Journal of Production Economics

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Syntetos A (2017) Forecasting for inventory planning: a 50-year review in Journal of the Operational Research Society

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Syntetos A (2010) Judging the judges through accuracy-implication metrics: The case of inventory forecasting in International Journal of Forecasting

 
Description This research contributed significantly towards a better understanding of the interactions between statistical (and judgemental) forecasting and inventory control. The research showed that there is considerable scope for improving the performance of real world systems by means of accounting for the interaction(s) under concern.
Exploitation Route By the design of better algorithms for inventory forecasting which is a crucial Operations Management area. In terms of research there is tremendous scope for amending the stock control literature by taking into account the fact that demand parameters are estimated rather than known, and amending the forecasting literature by taking into account the fact that forecasts are not an end in itself but rather an input into stock control models.
Sectors Aerospace, Defence and Marine,Digital/Communication/Information Technologies (including Software),Electronics,Manufacturing, including Industrial Biotechology,Retail

URL http://www.salford.ac.uk/business-school/research/operations-and-global-logistics-management/forecasting-and-inventory-management-bridging-the-gap
 
Description The findings of this project threw light into the interface between forecasting and stock control and motivated a number of initiatives to bridge the gap between these two disciplines: workshops, sections in conferences, special issues in academic Journals etc.
First Year Of Impact 2009
Sector Aerospace, Defence and Marine,Digital/Communication/Information Technologies (including Software),Manufacturing, including Industrial Biotechology,Retail
Impact Types Economic,Policy & public services

 
Description Commercialisation of an inventory management solution for intermittent demand items
Amount £60,000 (GBP)
Funding ID EP/G006075/1 
Organisation Engineering and Physical Sciences Research Council (EPSRC) 
Sector Public
Country United Kingdom
Start 02/2010 
End 04/2012
 
Description SAF Simulation Analysis & Forecasting AG 
Organisation SAF Simulation Analysis & Forecasting AG
Country Germany 
Sector Private 
PI Contribution Providing insights into the interface between forecasting and stock control and helping them to amend the solutions they offer to their customers.
Collaborator Contribution Data provision, interviews, focus group meetings invitations of the research team to visit them in their company.
Impact Conference presentations (both academic and practitioner oriented).
Start Year 2007
 
Description Ventana Systems Inc 
Organisation Ventana Systems Inc
Country United States 
Sector Private 
PI Contribution This was a rather short collaboration and I don't think we can claim and major contributions to them.
Collaborator Contribution Data provision, discussions and detailed demonstration of their software package.
Impact There haven't been any specific outputs yet - other than the indirect contribution of their participation to the project to a major publication in the Journal of the Operational Research Society.
Start Year 2007