Improving Inventory Control Using Forecasting

Abstract

This project studied and analyzed Electronic Controls, Inc.’s forecasting process for three high-demand products. In addition, alternative forecasting methods were developed to compare to the current forecast method. The following is a list of the main findings: ·The three selected products showed a prominent irregular component. ·The optimal forecasting method for each product was different. ·The current forecasting method produced unacceptable forecasts for two of the selected products. ·Two of the model-based forecasts were more accurate than the forecast produced by the current process. The following are the main recommendations to improve the current forecasting process: ·Electronic Controls should keep track of the sales data instead of the shipping data to forecast the demand of each product. ·Electronic Controls should keep track of the forecasting error in order to calculate the accuracy measures. ·Implementing the tracking signal for the forecast of each product will improve the accuracy of the current forecasting process.