Inventory Planning with Forecasting Expenditure

Sanjay Sharma

• Publisher: CRC Press
• Year: 2022
• ISBN:
  9781000545098
• Edition: 1
• Topic: Tecnología e ingeniería
• Subtopic: Ingeniería industrial

In industrial or business cases, purchasing and procurement are significant functions. Usually, a procurement plan is prepared based on certain predictions of consumption patterns or demand. When this plan is implemented, the benefit is obtained corresponding to forecast accuracy. In the available literature, forecasting accuracy is frequently discussed. A need is established to link forecasting accuracy with forecasting expenditures. After an explicit inclusion of the forecasting expenditure, this book describes inventory planning for procurement and production.

FEATURES

• Discusses forecasting expenditure in detail

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• Provides an analysis of reduction and increase in forecasting expenditures

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• Highlights advanced concepts that include procurement inventory, production planning, and priority planning in detail

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• Examines an approach in relation to the inclusion of an explicit cost of forecasting

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• Covers total cost formulation, modified total cost, relevant index, threshold value, and cost of forecasting in a comprehensive manner with the help of examples

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Inventory Planning with Forecasting Expenditure is useful for undergraduate and postgraduate students in engineering and management and has potential for elective and supplementary core courses.

1 Introduction

DOI: 10.1201/9781003267256-1

In an industrial or business case, purchase or procurement is a significant function. Usually a procurement plan is prepared on the basis of a certain prediction of consumption pattern or demand. However, when this plan is implemented, then the desired benefit is obtained corresponding to the forecast accuracy. In the available literature, forecasting accuracy is discussed a lot. A need is established to link the forecasting accuracy with a forecasting expenditure. After an explicit inclusion of the forecasting expenditure, the inventory planning for procurement/production is described in this book.

In this introductory chapter, a problem description is extended to incorporate the forecasting expenditure. The potential benefit is also mentioned briefly so that it can be incorporated in subsequent related chapters. However, first a planned schedule is explained that is relevant for a procurement as well as a production scenario...