Demand Forecasting and Lot-For-Lot Replenishment Policy for Agricultural Machinery Spare Parts
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Abstract
Agricultural machinery encourages farmers' activities to increase efficiency and fleetness. Because of the durability of the machines and wear after using the machinery, spare parts are always needed for replacement. For this reason, authorized dealers who take responsibility for after-sale service and spare parts sales must prepare their stock to meet their customers' demands expeditiously and efficiently. The analysis of spare parts demand from the case study company shows that the demand pattern is uncertain and unpredictable. To serve the customer’s demand, the replenishment policy of spare parts is highly momentous for inventory management to deliver on time to customers. This research studies the problem in a case study company, which is an agricultural machine spare parts company. The researcher improves forecast accuracy using a time series method that is fitted to each demand pattern, then a replenishment policy is set up. It is evaluated by customer fill rate and days sales of inventory. The result of this research shows that the time series forecast and the Lot-For-Lot policy with a daily review period can improve the fill rate for the seasonal demand pattern and the trend-seasonal demand pattern, with increases of 18.85% and 23.23%, respectively.
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