Forecasting and Risk Analysis in Supply Chain Management

Abstract

Forecasting is an underestimated field of research in supply chain management. Recently advanced methods are coming into use. Initial results are encouraging, but often require changes in policies for collaboration and transparency. In this paper we explore advanced forecasting tools for decision support in supply chain scenarios and provide preliminary simulation results from their impact on demand amplification. It appears that advanced methods may be useful to predict oscillated demand but their performance is constrained by current structural and operating policies. Improvements to reduce demand amplification, for example, may decrease the risk of out of stock but increase operating cost or risk of excess inventory.