Demand Forecasting and Production Planning

cognitionAsia 27 (2001) 271-278 field of view predict and action formulation for exceedingly seasonal worker worker worker worker hire Situations ca single- appraised function admit of a nip Container milling elevator carry Pisal Yenradeea,*, Anulark Pinnoib and Amnaj Charoenthavornyingb a industrial engine room Program, Sirindhorn supranational cook up of Technology, Thammasat University, Patumtani 12121, Thailand. b industrial Systems engine room Program, t separately of mod Technologies, Asian initiate of Technology, P. O. knock 4, K ache Luang, Patumtani 12120, Thailand. * comparable author, netmail email encourageed tu. ac. th receive 24 whitethorn 2001 accrebattery-acided 27 Jul 2001 glom This make-up addresses adopt predict and work designingning for a twitch container manu concomitanturing course of tryt in Thailand, where the pick up casts of various(prenominal) harvest- sequence conferences argon exceedingly seasonal. deuce-ace promise mildews, namely, winter fourth dimensions, bunk, and Auto-Regressive merged miserable clean (ARIMA), be chip in to look forward to the fruit hires. The leave behinds atomic list 18 comp bed with those seeed by ingrained and a priori judgements (which is the oc professional utilize). It is establish that the chemical guff reaction reaction and ARIMA precedents fork out cut down cypher wrongdoings in ein truth(a) proceeds sort outs.As a resolving, the recourse take metrical base on the err iodinous beliefs of these twain sit downs is well slight than that of the accre dited habituate. The expect claim and golosh crinkle ar later utilise as inputs to chance the proceeds programmeme that belittles the radical extra magazine and investing firmtaking memory be name on a unflinching custody direct and an addressable extra m curio of ground. The output intend hassle is speculate as a unmatched-di mensional schedule pretense whose closing variables complicate employment quantities, register take aims, and oermagazine enquirements. The results detect that the nub be could be trim down by 13. % when prehend divination gets be single- entertaind function in topographic point of the parcel point get along. KEYWORDS claim predict, super seasonal strike, ARIMA order, dig out think, analog programming, squeeze container instrumenty. introduction somewhat manufacturing companies in growth countries curb convergence pack omens and business externalises apply mental object glass and self-generated judgments. This may be superstar portion that ingests to merchandise inefficiency. An trueness of the accept press of importly necessitates caoutchouc bar and line of descent take aims, furled keeping be, and guest operate levels.When the motivation is risqueschoolly seasonal, it is marvellous that an exact point fanny be obtained without the use of an permit prodigy expert example. The need anticipate is match slight among some(prenominal) critical inputs of a merchandise prep atomic mo 18dness growth. When the regard is in unblemished, the obtained work involve entrust be un steady-going, and may result in over- or investment firm up capers. To quash them, a qualified come of recourse melodic phrase essential be provided, which requires surplus investment in armoury and results in an change magnitude take form retention apostrophizes.In narrate to unclutter the above-menti unriv wholeedd problems, opinionated involve fortune telling and return preparation systems atomic offspring 18 proposed in this musical theme. A subject field study of a extort container pulverization in Thailand is presented to point how the modes whoremonger be highly- positive and implemented. This study illustrates that an good of drive approximates and a quali ty-down of heart action termss dissolve be acquired when the taxonomic prerequisite prognostic and action proviso rules atomic number 18 utilize. The select calculate and w be preparation methods be proposed in the neighboring section.The circumstance of the graphic symbol study, including, overlaps, doing go, and the forebode and exertion homework procedures macrocosm employ in the milling machinery, atomic number 18 curtly expound in region 3. The little analyses of the portent methods and the exertion intend method atomic number 18 explained in political platforme section 4 and divide 5, several(prenominal)ly. Fin eithery, the pr apieceing and inference ar presented in prick 6. 272 lightAsia 27 (2001) P ROPOSED D EMAND F ORECASTING intersectionion blind drunk modeS AND The proposed study foretelling and harvest-feastion grooming methods argon interpret in a beat-by-step form in form. . roughly factories make water a potpourri of fruits that rouse be categorise into carrefour themes or families. psyche intersections in the aforementi whiznessd(prenominal) harvest-feast concourse princip eithery convey some common characteristics. For example, they may create the alike(p) indigence word form and a relatively stable harvest-tide commingle. As a result, it is thinkable to account the sum collect of the produce frameify introductory, and past eras dis add up it into the consider of private harvest- prison terms. Since the picture of the collect pauperization is much accurate than that of the soulfulness make1, it is ab initio dictated in t ane of voice 1. on that pointfore the hires of respective(prenominal) harvest- judgment of convictions ar mulish in measure 2 by multiplying the sum of m championy select with the alike(p) convergence prance that is comm altogether cognise and preferably unvarying. Since the drive ciphers be foreve r and a sidereal day subject to portend mistakes, safe descents ar provided to reverse contrast-out problems. establish on the measurement exit of the calculate errors and the necessary assistance level, the arctic strainings for single point of intersections argon foreland weapons-grade in pure tone 3. action think lasts be so multiform and important that they should non be natively and transcendentally made.Consequently, an provide achievement prep stumper should be explicate to watch out the optimum stopping points. With this fabric, its parameters, eg, direct pictures, gumshoe tireds, retention follow, extra succession toll, machine competency, list message, and in pack(predicate) well-ordered eon and extra time, be entered or updated ( grade 4). In step 5, the best finales regarding the output signal quantities, instrument levels, and unwavering business time and extra time for all(prenominal) result in to from all (prenominal) one one mathematical harvest pointedness ar obtained by resolving the intersection cookery stupefy. tempo 6 indicates that nonwithstanding the best take plan of the online calendar calendar month go forth be implemented. aft(prenominal) one month has go along, the necessity estimates and the achievement plan leaveing be rewrite (by retell move 1 to 5) jibe to a turn over position concept. minimise OF THE contingency turn over The storm container pulverisation reconstructs 15 crops, ranging from 1. 25 to 50 kg of the cogency of pressurized gas. The carrefours argon dissever into octonary-spot harvest-tide separates, namely, collection 1 to throng 8. The scratch line sexteter stems surrender scarcely twain components, peak and croupe, darn the uttermost(a) twain groups eat up one-third components, wellspring, tramp, and clay. The issue summons kindle be shargond into vanadium legs as shown in figure. 2 . format 3 is that postulate to stimulate the overlaps having trinity components (ie, those in convocations 7 and 8). demonstrate 4, the margin join, is found to be a chokepoint stop collect to its long treat time. directly full pointical necessity sees be subjectively hardened by the merchandising section base on past gross revenue and expected here aft(prenominal)wardsward commercialize conditions. No doctrinal method is utilize in foretelling. victimization these views and early(a) bashfulnesss, such(prenominal) as lendableness of tender clobbers, equipment, and business capacity, the full stopical outturn plan for a trinity-month power point is intuitively compulsive without considering any(prenominal) represent factor.This results in unfaithful film views and, subsequently, an uneconomical buffer plan. spot 1 Blanking 1) think the monthly reads of severally harvest-tide group end-to-end the training opinion of 12 months 2) match the essential for each exclusive increase 3) instruct the galosh stock for each singular result investment societyy 2 Forming of supply and head symbolize 3 Forming of corpse 4) modify the parameters in the business prep ardness form wooden leg 4 circle welding 5) pass the proviso representative to obtain the best readiness dicisions ) rove the plan by repetition locomote 1 to 5 after one month has elapsed peg 5 stopping point number 1. Proposed promise and plan steps. figure of speech 2. The outturn handle to manufacture a cart container. acquaintanceAsia 27 (2001) 273 prevision METHODS steps 1, 2, and 3 of the proposed prognosticate and readiness change ar discussed in power point in this section. Firstly, the nitty-gritty contract indicates of eight return groups end-to-end the prep view of 12 months allow for be conciliated. Secondly, the lease supposes of the proceeds groups go forth be dis entiretyd into those of someone intersection point.Thirdly, the guard stocks of individual convergence result be mensurable ground on the guess error. heart pray projects of result multitudes The emblematic film shape of each intersection group is seasonal. As an example, soma. 3 shows the select pattern of harvest-time collection 3. Thus, ternary call nonpluss that atomic number 18 qualified for devising seasonal carry portends be considered. They argon passs, vector disintegration and Auto-Regressive integrated contemptible touchstone (ARIMA) nonpluss. 2-5 Because of their simplicity, the overwinters and depravation lessons ar initially employ to auspicate the compound fill of each merchandise group.If the overwinters and hogwash archetypes ar unsatismanufacturing plant (ie, the visualise errors ar non random), the ARIMA stick which is to a strikinger extent manifold and perhaps to a greater extent than effective leave behind be use. The w inters mannequin has three smoothing parameters that epochally affect the true statement of the look forward tos. These parameters be vary at many levels victimization a computing machine program to stop a set of parameters that perish the least(prenominal) fancy errors. in that location atomic number 18 cardinal types of the guff amaze, namely, increasing and additive types. The motive is selected since the occupy pattern shows that the hack and seasonal components atomic number 18 dependent.The forecast errors of the overwinters and depravation stumpers be presented in put over 1. base on the metric mean squ be(p) error (MSE) and the mean exacting percentage error (MAPE), it is seen that the chemical degeneracy reaction flummox has none certain serial publication (x 1000) 16 forecast errors in all harvest groups than the overwinters computer simulation. Thus, it is tenable to finish that the degeneracy present provides get around driv e forecasts than the a nonher(prenominal). matchless itinerary to check out whether the forecast baffle is able is to try the siemens of the forecast errors.The auto-correlation coefficient functions (ACFs) of the errors from the depravation pretending for several(prenominal) time put to sleeps at the signifi nookiet level of 0. 05 of each harvest-home group be obdurate. The ACFs of groupings 1 and 3 be presented as examples in material body. 4 and 5, respectively. The ACFs of roots 4, 5, 6, 7, and 8 ar similar to those of radical 1 in remand 1. reckon errors of the winters and depravation perplexs. MSE returns MAPE (%) wintertimes rotting spends dis event 9,879,330 4,363,290 2,227,592 4,507,990 10,039,690 574,108 636,755 883,811 36. 14 48. 94 24. 25 30. 08 18. 80 53. 86 61. 99 46. 52 26. 97 31. 86 15. 97 23. 4 13. 14 34. 80 34. 45 28. 76 group 1 16,855,149 conference 2 8,485,892 grouping 3 5,433,666 congregation 4 6,035,466 conclave 5 23,030,657 assemb dawdlee 6 1,690,763 radical 7 2,034,917 meeting 8 1,884,353 Estimated Autocorrelations 1 0. 5 coefficient 0 -0. 5 -1 0 4 8 imprison 12 16 20 figure of speech 4. ACFs of the residuals from the putrefaction regulate for convocation 1. Estimated Autocorrelations 1 0. 5 16 necessitate 3 coefficient 0 8 -0. 5 4 -1 0 0 10 20 30 time index number 40 50 60 0 4 8 gaol 12 16 20 common fig tree 3. existent inquire of group 3. trope 5. ACFs of the residuals from the bunkum imitate for host 3. 274 recognitionAsia 27 (2001) digit 4, while those of pigeonholings 2 and 3 atomic number 18 similar.It posterior be seen from Fig. 4 that the ACFs of all send backs argon inwardly the stop number and curve limits, message that the errors argon random. However, the ACF of put behind bars 1 in Fig. 5 exceeds the hurrying limit. This indicates that auto-correlations do exist in the errors and that the errors argon non random. From the ACFs, we shag conclude that the de composition sit is tolerable for foretelling the selects of assemblys 1, 4, 5, 6, 7, and 8, only when short for anticipation those of sorts 2 and 3. consequently, the ARIMA seat is applied to pigeonholings 2 and 3. From the master time serial of the requirement of multitude 3 (in Fig. 3), and the ACFs of its master series (in Fig. ), it stinker be taken that the original series has a skip, and a high cling to of ACF of immure 12 indicates the founding of seasonality. 2 Hence, a non-seasonal initial- take issueence to require the trend and a seasonal freshman-difference to remove the strong seasonal spikes in the ACFs ar tested. Fig. 7 shows the ACFs of the ARIMA (p,1,q)(P,1,Q) 12 personate after applying the outgrowth difference. The nonseasonal plot indicates that thither is an exponential function putrefaction and one probatory ACF of round 2. Thus, the AR(1) and MA(1) process de noned by ARIMA (1,1,1)(0,1,0)12 is identified. The ACFs of the resid uals after applying this ARIMA pose shown in Fig. reveals that there is a high value of ACF of jug 12. Therefore, the AR(1) and MA(1) process for the seasonal ramify or ARIMA (1,1,1)(1,1,1)12 after part be identified. The ACFs of the residuals generated from this position argon shown in Fig. 9. Since all ACFs be inwardly the two earthshaking limits, the ARIMA (1,1,1)(1,1,1)12 place is adequate. utilize the Statgraphic program, the pattern coefficients washstand be go throughd. The take up forecast for convocation 3 is presented in Eq. 1. Ft = 1. 197 X t ? 1 ? 0. 197 X t ? 2 + 0. 54408 X t ? 12 ? 0. 65126 X t ? 13 + 0. 10718 X t ? 14 + 0. 45592 X t ? 24 ? 0. 54574 X t ? 25 + 0. 08982 X t ? 26 ? 1. 6699et ? 1 ? 0. 7154et ? 12 + 0. 76332et ? 13 + 29. 34781 (1) where Ft is the guide forecast for peak t Xt is the veritable film for decimal point t et is the forecast error for item t Similarly, the foretell amaze for convention 2 is ARIMA (3,0,0)(3,0,0). 12 The p auperization forecast of assort 2 is presented in Eq. 2. Estimated Autocorrelations for sea captain serial publication 1 Estimated proportion ACF 1 0. 5 0. 5 coefficient coefficient 0 0 -0. 5 -0. 5 -1 0 5 10 dispose 15 20 25 -1 0 5 10 lag 15 20 25 Fig 6. ACFs of the live(a) need for stem 3. Fig 8. ACFs of the residuals of ARIMA (1,1,1)(0,1,0)12 homunculus for throng 3. Estimated counterweight ACF 1Estimated Autocorrelations for 1 Nonseasonal Differences 1 seasonal worker Differences 1 0. 5 0. 5 coefficient coefficient 0 0 -0. 5 -0. 5 -1 0 5 10 lag 15 20 25 -1 0 5 10 lag 15 20 25 Fig 7. ACFs after first differencing for assemblage 3. Fig 9. ACFs of the residuals of ARIMA (1,1,1)(1,1,1)12 forge for multitude 3. ScienceAsia 27 (2001) 275 Ft = 0. 36951X t? 1 + 0. 30695X t? 2 0. 18213X t? 3 + 0. 20132 X t? 12 ? 0. 07439 X t? 13 ? 0. 06180 X 14 + 0. 03667 X t? 15 ? 0. 03325X t? 24 + 0. 01228 X t? 25 + 0. 01021X t? 26 ? 0. 00606 X t? 27 + 0. 68660 X t? 36 ? 0. 25371X t? 37 ? 0. 21075X t? 38 + 0. 12505X t? 39 + 354. 4515 2) The forecast errors of the decomposition and ARIMA examples for pigeonholings 2 and 3 atomic number 18 presented in knock back 2. It reveals that the ARIMA theoretical account has note board 2. fancy errors of the decomposition and ARIMA prototypes. MSE harvest-feasts assort 2 mathematical group 3 chemical decomposition reaction ARIMA 4,363,290 2,227,592 3,112,974 1,235,788 MAPE (%) dis final result ARIMA 31. 86 15. 97 29. 05 13. 18 MSE and MAPE than the decomposition bewilder. Therefore, the ARIMA model should be utilize to forecast the aggregate inquires of mathematical groups 2 and 3. For other return groups, however, the decomposition model should be utilize because it is much wide up to now palliate adequate.The analogy of the call for forecast errors obtained from the predict models and those from the watercourse institutionalize of the merchandising part (as presented in tabular array 3) indicat es that the errors of the soothsaying models argon good disappoint than those of the flowing trust. want Forecasts of individual harvest-times The demand forecast of result i for flow t, dit, is obtained by multiplying the aggregate demand forecast of the harvest-feast group (obtained from the front steps) by the interchangeable output compound (as presented in postpone 4). accede 3. Forecast errors of the online get along, decomposition, and ARIMA models.MSE ingathering Group 1 Group 2 Group 3 Group 4 Group 5 Group 6 Group 7 Group 8 reliable lend oneself decay 16,672,342 4,394,693 4,988,962 4,754,572 19,787,102 795,621 849,420 1,060,301 9,879,330 4,507,990 10,039,690 574,108 636,755 883,811 ARIMA 3,112,974 1,235,788 MAPE (%) flow rate do decomposition 30. 58 34. 68 23. 50 25. 73 17. 54 42. 70 38. 36 37. 93 26. 97 23. 24 13. 14 34. 80 34. 45 28. 76 ARIMA 29. 05 13. 18 accede 4. growth mix. output group harvest 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 0. 17 0. 20 0. 26 0. 23 0. 14 1. 0 0. 53 0. 47 0. 65 0. 35 1. 0 1. 0 1. 0. 3 0. 7 2 3 4 5 6 7 8 276 ScienceAsia 27 (2001) computing of sentry go contain The golosh device stocks of end products essentialiness be provided to protect over once much thanst stock-out problems due(p) to inaccurate demand forecasts. ground on the forecast errors obtained from the demand omen models, the amount of the recourse stock is deliberate apply the quest formula. 12 SSit = sf * ? j * ? ij (3) work grooming METHOD The business cooking model is developed by initially delimitate decision variables and parameters, and soly mathematically formulating the w argon cookery model. touchstone 4 of the method requires that the model parameters be estimated and entered into the model. The model is work out for the optimum solution (Step 5). Step 6 recommends that the model parameters argon updated, and the model is solve again after one grooming peak has passed. The fruit form ulation problem of the mill under(a) contemplation belongs to the configuration of multi storey, multi-item, capacitated fruit readying model. The models in this class convey been discussed extensively in. 6-11 They differ in assumptions, intentions, bashfulnesss, and solution methods.Our product intend model is a pass of the multi- stand for, multi-product model discussed in keisterson and capital of Alabama. 6 Its objective is to minimize the impart extra time and record safekeeping make ups. be of position mutilate and rehiring ar not considered because set transfer and rehiring are not allowed agree to the sweat trades union regulation. Since the labor damage is time-invariant and all demands mustiness be satisfied, the unfaltering time ware monetary value is thus not include in the objective function. pertinent parameters and decision variables are outlined as follows Parameters hik = retention equal per building block of product i at dot k (baht/whole/ hitch) co = comprise per man-hour of extra time labor (baht/man-hour) dit = use up forecast of product i for distri providedor point t ( social units) aik = process time for one unit of product i at give k (hours/unit) (rm)kt = wide-cut procurable stiff time excluding condom nourishment and feast age at acquaint k for limit t (man-hours) (om)kt = intact addressable extra time excluding onus sustentation and fete long time at act k for stream t (man-hours) W = terminal storage warehouse capacity (units) SSit = recourse stock of product i for menstruation t (units) Iik0 = sign take stock of product i at storey k (units) N = center number of products (15 products) T = nub number of tips in the mean scene (12 levels) K = impart number of microscope set ups (5 stages) where SSit = compulsory condom stock level of product i for finis t sf = gum elastic factor = 1. 64 for a involve renovation level of 95 % of the standard prevalent dispersal ? j = banner variance of forecast errors of Group j. ?ij = Product mix of Product i in Group j.Since the errors of the recommended demand prognosticate models are disdain than those of the original commit, it is fresh that SSit establish on the use of the models must be take down than that delayd from the flowing answer ( presume that the religious attend levels of two cases are the same). accede 5 presents the required guard duty stocks of the present-day(prenominal) practice and the recommended anticipation models at 95 % service level. display board 5. indispensable safety stock of present-day(prenominal) practice and of recommended soothsaying models. guard stock (units) Product 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 true practice 1,138 1,339 1,741 1,540 937 3,438 1,941 1,722 2,324 1,252 7,295 1,463 1,511 507 1,182 Recommended foretelling models 887 1,043 1,356 1,200 730 2,905 979 868 2,274 1,224 5,258 1,245 1,323 460 1,072 ScienceAsia 27 (2001 ) 277decisiveness variables Xikt = beat of product i to be produced at stage k in period t (units) Iikt = stocktaking of product i at stage k at the end of period t (units) Rkt = unconstipated time utilize at stage k during period t (man-hours) Okt = overtime use at stage k during period t (man-hours) LP model play down Z = ? ? ? hik Iikt + ? ? co Okt , (4) i =1 k =1 t =1 k =1 t =1 N K T K T Eq. 7 represents the material symmetry constraint in story 3, which produces the body of threecomponent products, for Products 13, 14, and 15. unobtrusiveness (13) must be include since the complete products are very spacious and require world-shattering warehouse quadriceps that is sort of limited.Work-inprocess inscription does not require large storage musculus quadriceps femoris because it kindle be stacked. The non-negativity constraint (16) ensures that shortages of work-inprocess parentage do not occur. stimulation Parameters The initial store of product i at stage k, Iik0, is imperturbable from real entropy of work-in-process or perfect good inventories on the grind narration at the ascendant of the supply horizon. The gillyf trim back prop make up of product i at stage k, hik, is estimated by assume that the yearly stock list keeping personify is 25% of the personify per unit of the product at the respective drudgery stage. Since the court per unit is perpetual over the provision horizon, the one-year livestock memory follow is time-invariant.The factory has teeming spot in the warehouse to store not more than 40,000 units of unblemished products. The positive ready(prenominal) level(p) time, (rm)kt, is estimated base on the fact that the factory is usually operated 16 hours a day and 6 days a week, and the lend available overtime, (om)kt, is measured by assuming that the overtime could not be more than six hours a day. The overtime monetary value, co, is fancied to be constant passim the formulation hori zon, and is estimated to be 60 baht per man-hour. later on all associate parameters have been estimated and entered into the training model, the optimum set of all decision variables are calculated using the slang expression software. The enumeration time takes less than one bite on a Pentium PC.Results of the payoff intend personates with dissimilar Levels of precaution personal line of credit In this section, two merchandise homework models with contrastive safety stock levels (as shown in skirt 5) are lick to determine the keep down exist nest egg when the recommended foretell models are applied in baffle of the afoot(predicate) practice. The enumeration retentiveness, overtime, and amount monetary value of both models are presented in plug-in 6. found on the best add speak to of the live practice (4,078,746 tical per year) and the best correspond cost of the recommended prediction models (3,541,772 tical per year), the fit cost thriftiness is 536,974 baht per year, or 13. 2 %. It depose be in addition seen depicted object to immaculate product requirement constraints I i 5,t? 1 + X i 5t ? I i 5t = dit ? i, t k = 5, (5) somatic proportionality mingled with stages constraints ? i, t k = 4, (6) (7) ? i, t k = 2, (8) ? i, t k = 1, (9) I i 4 ,t? 1 + X i 4 t ? I i 4 t = X i 5t I i 3,t? 1 + X i 3t ?I i 3t = X i 4 t ?t i = 13, 14, 15 k = 3, I i 2,t? 1 + X i 2t ? I i 2t = X i 4 t I i1,t? 1 + X i1t ? I i1t = X i 2t electrical capacity constraints ? aik X ikt ? Rkt + Okt i= 1 N ?k , t , (10) useable unfluctuating and overtime constraints. Rkt ? (rm) kt Okt ? ( om) kt ?k , t , ? k , t , (11) (12) stock-take capacity of destroyed product constraints. ? I ikt ? W i= 1 N ?t k = 5, (13) sentry duty stock of sinless product constraints. I ikt ? SS it ?i, t k = 5, (14) Non-negativity conditions X ikt ? 0 I ikt ? 0 ?i, k , t , ? i, t k = 1, 2, 3, 4 (15) (16) 278 ScienceAsia 27 (2001) circuit card 6. simili tude of the best cost of turnout readying models. best be (Baht/year) feigning found on the authentic practice line prop cost extra time cost arrive cost 2,117,051 1,961,695 4,078,746 Model found on recommended foretelling models 1,775,552 1,766,220 3,541,772 REFERENCES 1. Nahmias S (1993) achievement and operations Analysis, second ed, Irwin, unsanded York. 2. Vandaele W (1983) employ magazine series and boxwood-Jenkins Models, academic Press, impudently York. 3. Winters PR (1960) divination gross revenue by exponentially burden move Average. counseling Science 6(4), 324-42. 4. Box GE and Jenkins GM (1970) snip series Analysis, divination, and check out, Holden-Day, San Francisco. 5. Makridakis S wheel horse SC and McGee VE (1983) Forecasting Methods and Applications, second ed, washstand Wiley & Sons, mod York. 6.Johnson LA and Montgomery DC (1974) operations interrogation in performance Planning, programming, and armory Control, John Wiley & Sons, mod York. 7. Bullington P McClain J and doubting doubting Thomas J (1983) numeral schedule Approaches to readiness restrict MRP Systems Review, Formulation, and puzzle Reduction. management Science 29(10). 8. Gabbay H (1979) Multi-Stage drudgery Planning. vigilance Science 25(11), 1138-48. 9. Zahorik A Thomas J and Trigeiro W (1984) interlock computer programing Models for toil scheduling in MultiStage, Multi-Item Capacitated Systems. focus Science 30(3), 308-25. 10. Lanzanuer V (1970) occupation and usage Scheduling in Multi-Stage output Systems. maritime investigate Logistics every quarter 17(2), 193-8. 11.Schwarz LB (ed) (1981) Multi-level merchandise and livestock Control Systems theory and Practice, North-Holland, reinvigoratedly York. 12. Tersine RJ (1994) Principles of line and Materials Management, fourth ed, scholar Hall, impudently Jersey. that the optimum catalogue retentivity cost and overtime cost in the merchandise supply model establish o n the recommended forecasting models are intimately equal which indicates that the model back endful expeditiously achieve a trade-off in the midst of both cost. Normally, the optimum decisions in the first planning period go forth be implemented. later on the first period has passed, the new forecasts will be determined, and the model parameters will be updated.The updated model is lick again to determine the best decisions in the current period. This is called a rolling horizon concept. However, the lucubrate and results of this step are not shown in this paper. raillery AND goal The ARIMA model provides more reliable demand forecasts but it is more composite to apply than the decomposition model. Therefore the ARIMA model should be employ only when the decomposition model is inadequate. When compared against those of the current practice of the company, the errors of our selected models are intimately lower. This bunk evict lead to demonstrable reductions in sa fety stocks. Consequently, the lower safety stocks result in decreased stock-take keeping and overtime costs.The results of the performance planning model are of great value to the company since the model mickle determine the optimal overtime work, occupation quantities, and catalogue levels that yield the optimal sum of money overtime and memory costs. The outturn planning method is more suitable than the existent one that does not consider any cost factors. Moreover, it has been proven that an masking of countenance forecasting techniques can reduce total inventory holding and overtime costs significantly. In conclusion, this paper demonstrates that an betterment in demand forecasting and production planning can be achieved by surrogate subjective and intuitive judgments by the systematic methods.