Joint effect of forecasting and lot-sizing method on cost minimization objective of a manufacturer: a case study

Forecasting and lot-sizing problems are key for a variety of products manufactured in a plant of finite capacity. The plant manager needs to put special emphasis on the way of selecting the right forecasting methods with a higher level of accuracy and to conduct procurement planning based on specific lot-sizing methods and associated rolling horizon. The study is con-ducted using real case data form the FibertexPersonal Care, andhas evalu-ated the joint influence of forecasting procedures such as ARIMA, exponen-tial smoothing methods; and deterministic lot-sizing methods such as the Wagner-Whitin method, modified Silver-Meal heuristicto drawinsights on the effect of the appropriate method selection onminimization ofoperational cost. The objective is to explore their joint effect on the cost minimization goal. It is found that a proficient selection processhas a considerable impact on performance. The proposed method can help a managertosave substantial operational costs.