Demand Management

Demand Management

1. Demand Management

   • Focused efforts to estimate and manage customers, the intention of using this information to shape operating decisions
     • The essence of demand management is to further the ability of firms throughout the supply chain, particulary manufacturing through the customer
     • To collaborate on activites related to the flow of product, services, information, and capital

2. Balancing Supply and Demand

   • External balancing methods
     • Are used in an attempt to change the manner in which the customer orders in an attempt to balance the supply-demand gap.
   • Internal balancing methods
     • Utilize an organization´s internal processes to manage the supply -demand gap, used to manage the imbalance between supply and demand
       • Their use and level of implementation will be determined by the nature of the product and the cost of stocking out

3. Traditional Forecasting

   • The key to succesful forecasting is to minimize the error between actual demand and forecasted demand
   • Independent demand
     • Is the demand for the primary item
   • Dependent demand
     • Is directly influenced by the demand for the independent item
   • Simple Moving Average
     • Is probably the simplest to develop method in basic time series forecasting, based on recent history and allows for the removal of random effects
       • At = Sum of last n demands / n
   • Weighted Moving Average
     • Method assigns a weight to each previous period with higher usually given to more recent demand
       • At = 0.60Dt + 0.25Dt-1 + 0.15Dt-2
   • Exponential Smoothing
     • Needs three types of data: an average of previous demand, the most recent demand, and a smoothing constant
       • At = α( Demand this period) + (1- α) (Forecast calculated last period)
   • Adjusting Exponential Smoothing for trend
     • This is done by computing the average of the series in the previous period to the average computed last period
       • At = α( Demand this period) + (1- α) (Average + trend estimate last period)
   • Seasonal Influences on Forecasts
     • Many organizations are faced with seasons that repeat themselves during a particular period
       • https://www.youtube.com/watch?v=M1PiR8xOYPs
   • Forecast Errors
     • Cumulative sum of forecast errors
       • CFE= ∑ et
     • Mean absolute percent error
       • MAPE =(∑(et/Dt)100)/N
     • Mean absolute deviation
       • MAD =(∑et)/N
     • Mean squared error
       • MSE =(∑〖e2 t〗)/N

4. Sales and Operations Planning

   • Step 1: Run sales forecast reports
     • Step 2: Demand planning phase
       • Step 3: Supply planning phase
         • Step 4: Pre-S&OP meeting
           • Step 5: Executive S&OP meeting

5. Collaborative Planning, Forecasting, and Replenishment

   • CPFR has become recognized as a breakthrough business model for planning, forecasting, and replenishment
     • • https://www.youtube.com/watch?v=jGOEU3El06E

6. Fulfillment Models

   • Channels of Distribution
     • Consist of one or more organizations or individuals who participate in the flow of goods, services, information, and finances from the production point to the final of consmption
       • Logistic channel
       • Marketing channel
   • Direct-to-Customer (DTC)
     • Integrated fulfillment
     • Dedicated fulfillment
     • Drop-Shipped Fulfillment
     • Outsourced Fulfillment
     • Store Fulfillment
     • Flow-Through Fulfillment

7. Gabriela Luna Ortiz

   • Bibliografía Coyle, J. (2013). Managing Supply Chain. Cengage Learning. CPFR. (s.f.). Colaborative Planning, Forecasting. Recuperado el 05 de 03 de 2015, de https://www.youtube.com/watch?v=jGOEU3El06E Forecasting. (s.f.). Recuperado el 05 de 03 de 15, de https://www.youtube.com/watch?v=M1PiR8xOYPs

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