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Splitting hybrid Make-To-Order and Make-To-Stock demand profiles

Wolfgang Garn,J. Aitken

Published 2015 in arXiv: Methodology

ABSTRACT

In this paper a demand time series is analysed to support Make-To-Stock (MTS) and Make-To-Order (MTO) production decisions. Using a purely MTS production strategy based on the given demand can lead to unnecessarily high inventory levels thus it is necessary to identify likely MTO episodes. This research proposes a novel outlier detection algorithm based on special density measures. We divide the time series' histogram into three clusters. One with frequent-low volume covers MTS items whilst a second accounts for high volumes which is dedicated to MTO items. The third cluster resides between the previous two with its elements being assigned to either the MTO or MTS class. The algorithm can be applied to a variety of time series such as stationary and non-stationary ones. We use empirical data from manufacturing to study the extent of inventory savings. The percentage of MTO items is reflected in the inventory savings which were shown to be an average of 18.1%.

PUBLICATION RECORD

  • Publication year

    2015

  • Venue

    arXiv: Methodology

  • Publication date

    2015-04-14

  • Fields of study

    Mathematics, Business, Engineering, Computer Science

  • Identifiers
    arXiv 1504.03594
  • External record

    Open on Semantic Scholar

  • Source metadata

    Semantic Scholar

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