Forecasting and inventory management:

Bridging the gap

Opening session

Aris A. Syntetos and John E. Boylan

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Outline

EPSRC – EP/D062942/1 (Aris)EPSRC – EP/D062942/1 (Aris)2222

Agenda for our meetingAgenda for our meeting4444

EPSRC – EP/F012632/1 (Aris and John)EPSRC – EP/F012632/1 (Aris and John)3333

Research backgroundResearch background1111

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Research background (…1 of 3)

John’s research with Roy Johnston in forecasting and stock control, with particular emphasis on intermittent demands

Aris’ PhD under John’s supervision: ‘Forecasting of intermittent demand’

Our work necessitated the clarification of what is ‘intermittent demand’ in operational terms?

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Research background (...2 of 3)

Consequent work in the classification of demand patterns for forecasting and stock control purposes

Williams (1984) Eaves and Kingsman (2004)

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Research background (...3 of 3)

Joint work with John Croston resulted in the proposal of a theoretically sound categorisation solutions, for forecasting purposes only:

Further work into this area demonstrated the complexity arising due to the interaction between forecasting and stock control.

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EPSRC – EP/D062942/1

On the development of theory-informed operationalised definitions of demand patterns

A simulation intensive investigation that aims at the development of useful, universally applicable, rules for classifying demand patterns

Theory-data loops to reflect the complexity of the problem and the interaction between forecasting and stock control

We will be talking more about this project later today: Forecasting – stock control interactions I (Aris and Zied)

This is a 2-year project started last October.

Very fruitful research area: four papers already submitted for peer review

John is contributing as part of the project review team.

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EP/D062942/1 - Industrial collaborators

Brother International, UK

Computer Science Corporation

Valves Instrument Plus, Ltd

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Collaboration for Success through People (CSP)

EPSRC call under the CSP initiative for expanding the scope of curent

projects through the exploitation of inter-disciplinary opportunities

Funds were made available for people based activities and exchanges

That resulted in our joint proposal (Aris and John) that led to our project

This is a 9-month project with no specific deliverables, other than exploring

and hopefully utilising potential synergies, establishing longer-term contacts

and identifying promising new avenues for further research

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.

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Objectives - EP/F012632/1

The aim is reflected on the following objectives

1. To explore how statistical forecasting models (which focus on mean demand and

forecast error variability) and System Dynamics (SD) models (which focus on

changes in mean demand) can be integrated.

2. To explore the effects of judgemental forecasting (or judgemental adjustments to

statistical forecasts) on levels and variability of forecasts and the potential for

their incorporation in System Dynamics models.

3. To extend this investigation to examine the effect on inventory systems, for a

range of inventory policies.

4. To examine how SD can be used to inform and educate those involved in

judgemental forecasting.

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Collaborators

Academics Institution Expertise Professor John Boylan BCUC Co-ordination team Dr Aris Syntetos Salford University Co-ordination team Dr Stephen Disney Cardiff University System Dynamics Professor Henk Akkermans Tilburg University System Dynamics Professor Leo Strijbosch Tilburg University Forecasting/Inventory Dr Tarkan Tan Eindhoven University Inventory Modelling Professor Nada Sanders Texas Christian Univ. Judgemental Forecasting Dr S (Vish) Viswanathan Nanyang University Forecasting/Inventory Practitioners Company Specialisation Dr Wolfgang Schutz SAF – AG Forecasting software Dr Stephan Kolassa SAF – AG Forecasting software Dr Bob Eberlein Ventana Systems, Inc System Dynamics Software Reviewers Institution Expertise Professor Paul Goodwin Bath University Judgemental forecasting Professor Brian Dangerfield Salford University System Dynamics Supporters: Zied Babai, Mohammad Ali and Mona Mohammadipour

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Meetings and dissemination

Physical meetings to be conducted between John and Aris and the other collaborators during the course of the project

We have also introduced web-based conference communications in order to: i) keep the costs down; ii) introduce some flexibility and the possibility for ad-hoc virtual meetings

A web-site hosted by the University of Salford has already been created

We are looking at making this facility an interactive mode of communicating and posting ideas

Progressive incorporation of the outcomes of our meetings, research findings etc

Any ideas that you may have in improving this facility would be very welcomed

Dissemination of our work through: System Dynamics Review (Wiley) and International Journal of Production Economics (Elsevier)

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Initial meeting

One-hour discussion sessions where the group can be updated on latest developments, reflecting your perspective and expertise

Open and relaxed discussions allowing the time for constructive comments to be made and explore the synergies between the various areas

As we are all often working within fairly well defined small research communities, ‘basic’ questions would not do any harm – on the contrary they may facilitate a better understanding of the common ground between us

Breakfast is served from 07.30 – 08.45 am

The dinner tonight is at 07.00 pm

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Proposed timetable

Sessions (Tuesday) Facilitator(s)

Opening session John and Aris

System Dynamics Brian

Software perspective (Forecasting) Stephan

Forecasting – stock control interactions I Aris and Zied

Forecasting – stock control interactions II Leo

Forecasting – stock control interactions III Tarkan

Session (Wednesday) Facilitator(s)

System Dynamics – Bullwhip ISteve

System Dynamics – Bullwhip II John and Mohammad

Concluding session John and Aris

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Looking forward to an exciting project

Questions …?

http://www.mams.salford.ac.uk/CORAS/Projects/Bridging_The_Gap/