About this Presentation
This presentation describes the four types of seasonality (holiday promotions, new product introduction, reverse seasonality and sharp demand changes) and focuses on the sharp demand changes. Dynamic buffer management (DBM) is generally used to adjust buffer size up or down over time; however, DBM doesn't respond quick enough to respond to sharp demand changes. An example is provided showing the impact of inventory balance using DBM during sharp demand changes. The assumptions, benefits, and shortcomings of using DBM and traditional forecasting are provided and compared under different scenarios. In Inherent Simplicity (a software package for supply chains) the steps used in each stage of the sharp demand change are provided: 1. Stock buildup; 2. Wait for stock; 3. Inside the high demand; 4. Stock builddown; 5. Back to normal. An example is provided.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
Seasonality is a significant factor in distribution and manufacturing, affecting demand patterns and requiring careful management.
Both DBM and traditional forecasting have their strengths and weaknesses, and their application should be determined by the nature of the demand pattern.
In the face of sharp demand changes, it is advisable to use traditional forecasting for stock planning and then revert back to DBM as quickly as possible.
Instructor(s)
