FORECASTING TECHNIQUES FOR A NEEDLE MANUFACTURER

Abstract

Currently, one of the most significant activities in supply chain management is inventory management, so various theories and concepts have been illustrated on how to get a well-managed inventory. The purpose of this research is to optimize the inventory level and suggest procurement planning to know the demand forecast and a proper replenishment quantity of consumable stock, ABC Analysis model based on dollar value has been applied to prioritize significance of the stock for the company to pay attention to. Forecasting techniques use historical data of actual consumption to average demand. Moving Average Forecasting (MVA) and Single Exponential Smoothing forecasts (SES) help to predict demand in the next period. Forecast error measurement such as Mean Absolute Deviation (MAD) and Mean Absolute Percentage Error (MAPE) could support to find which of the forecast techniques is more accurate. Reorder Point (ROP) and Safety Stock (SS) can be recommended to compute an optimum stock during replenishment cycle to maintain customer service level. These methods can save over 2 million baht of inventory cost.