Supply and demand prediction by 3PL for assortment planning

Abstract

To underscore the critical role of predictive capabilities in third-party logistics (3PL) companies for assortment planning, particularly within the rapidly evolving e-commerce sector and business to business (B2B) flows. This study employs a comprehensive literature review on the forecasting capabilities of 3PL firms, enriched by empirical research across nine logistics facilities. It leverages statistical tools and the ARIMA_PLUS algorithm to evaluate the precision and dependability of demand and supply forecasts generated by these companies. The research reveals that 3PLs possess the ability to generate accurate demand and supply forecasts utilizing advanced forecasting tools. The effectiveness of these forecasts is closely linked to the quality of data available, and the expertise of the personnel involved. Challenges arise in forecasting for smaller order volumes, which are more common in e-commerce flows. The study also highlights that technological advancements and investments in data analytics are pivotal in enhancing forecast accuracy. The investigation focuses on a select group of 3PL companies, potentially limiting the generalizability of the findings. Moreover, the study underscores the necessity for further exploration into how technological innovations impact forecasting capabilities. By emphasizing the significance of 3PL firms' predictive abilities, also for e-commerce assortment planning, this paper addresses a notable gap in existing research. Its insights are invaluable for businesses contemplating logistics outsourcing and for 3PL providers aiming to advance their forecasting proficiency. The findings stress the importance of integrating advanced forecasting models and analytics to stay competitive in the dynamic e-commerce landscape.