The value of demand forecast updates in managing component procurement for assembly systems

Beyond Retail Stores: Managing Product Proliferation along the Supply Chain

“…An increase in the upper bounds for the downstream quantities provides the manufacturer with additional flexibility to adjust order quantities according to updated demand forecasts, leading to higher profits. This result is in line with Lee and Tang (1997) and Cao and So (2016). Lee and Tang (1997) state that redesigning the production processes such that high value-added and short operations take place later than low value-added and long operations leads to higher profits.…”

“…Song and Zipkin (2012) study such a setting where order quantities can be updated downwards (after paying the cost) as new demand information arrives. Cao and So (2016) consider an assembler ordering from two suppliers (effectively two ordering decisions) with demand forecasts updated over time.…”

Beyond Retail Stores: Managing Product Proliferation along the Supply Chain

“…forecasts, leading to higher profits. This result is in line with Lee and Tang (1997) and Cao and So (2016). Lee and Tang (1997) state that redesigning the production processes such that high value-added and short operations take place later than low value-added and long operations leads to higher profits.…”

“…Lee and Tang (1997) state that redesigning the production processes such that high value-added and short operations take place later than low value-added and long operations leads to higher profits. Cao and So (2016) find that a manufacturer can generate high profits if a supplier with a long lead time supplies a low-value component, whereas another supplier with the short lead time supplies a high-value component. Part B of Proposition 2 establishes effectively the same result for a more general setting.…”

Sustainable Governance of Organic Food Production When Market Forecast Is Imprecise

“…Proposition 1 provides the value of τ when d i potentially is the optimal solution of the production problem with an unreliable demand forecast. Because many demand forecasting/evaluating technologies are proposed in the literature, such as the causal method, time-series analysis and the expert systems method [64], different forecasting technologies have different limitations and evaluation preciseness. However, the potential optimal solutions regarding the actual demand are estimated by Proposition 1.…”