Project: Demand Forecasting at Alfa Laval

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Title: Demand Forecasting: A study at Alfa Laval in Lund

Accurate forecasting is a real problem at many companies and that includes Alfa Laval in Lund. Alfa Laval experiences problems forecasting for future raw material demand. Management is aware that the forecasting methods used today can be improved or replaced by others. A change could lead to better forecasting accuracy and lower errors which means less inventory, shorter cycle times and better customer service at lower costs. The purpose of this study is to analyze Alfa Laval’s current forecasting models for demand of raw material used for pressed plates, and then determine if other models are better suited for taking into consideration trends and seasonal variation.


1. Introduction
1.1 Background
1.2 Alfa Laval – company presentation
1.3 Problem discussion
1.4 Problem questions
1.5 Purpose
1.6 Delimitations
1.7 Time plan
1.8 Definition of Concepts
1.9 Disposition
2. Methodology
2.1 Scientific perspective – Positivism vs. Interpretivism
2.1.1 Our perspective – Interpretivism
2.2 Scientific approach – Deductive vs. Inductive
2.2.1 Our scientific approach – Deductive
2.3 Research strategy – Quantitative vs. Qualitative
2.3.1 Our research strategy – Quantitative
2.4 Research method – Action Research
2.4.1 Our motivation of research method
2.5 Data Collection- Theoretical and Empirical
2.5.1 Our data collection method
2.6 Scientific Credibility
2.6.1 Our choice of scientific credibility
2.7 Summary of Methodology
3. Theory
3.1 Demand forecasting – Subjective and Objective
3.1.1 Subjective forecasting approach
3.1.2 Objective forecasting approach
3.1.3 Summary of subjective and objective approaches
3.2 Time series analysis
3.3 Definition of Time Series Behaviours
3.4 Models for Time Series Forecasting
3.4.1 Moving average
3.4.2 Exponential smoothing
3.4.3 Autocorrelation
3.5 Evaluating forecasting accuracy
3.6 Theoretical framework
4. Empirical
4.1 Reintroduction of Alfa Laval
4.2 Interviewees
4.3 Ordering Raw Material at Alfa Laval
4.3.1 How an order is placed
4.3.2 How forecasting of raw material demand is done
4.3.3 What the forecast sent to suppliers is based on
4.3.4 Forecasting accuracy calculations
4.3.5 Six Sigma
4.3.6 Results of poor forecasting at Alfa Laval
4.4 Current forecasting models
4.4.1 Summary of the forecasting methods used by Alfa Laval
4.5 Items to be analyzed
4.6 Gathering of data
5. Analysis
5.1 Foundation of analysis
5.2 Raw material analyzed
5.3 The analytical process
5.4 Summary and discussion of analysis
6. Conclusion
6.1 Results
6.2 Reflections
6.3 Client Validity
6.4 Future work

Source: Vaxjo University

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