Forecasting the Demand of Surgical Mask to Raw Material Purchasing Planning

Abstract

The objectives of this research are (1) to study and analyze the customer demand for surgical mask using forecasting methods, and (2) to analyze the economic order quantity of raw material and reorder point for surgical mask production to reduce production costs. In the production process, the case study company sources materials from suppliers in China. Each order of raw materials is placed in large quantities to meet customer demand, leading to significant inventory. This occurs because the case study company lacks sales forecasting and does not establish reorder points for raw materials, resulting in increased storage costs. The study found that the historical customer demand data Patterns both trend and seasonal patterns. Therefore, the researchers chose to use Winters’ Exponential Smoothing Method to create a forecasting model. The appropriate order quantity was calculated to match customer demand. By comparing the actual customer demand data with the calculated order quantity using the forecasting model, it was found that the calculated order quantity based on the forecasting model had a forecast error of 0.56%. Moreover, the overall costs were reduced by 67.77%, or 68,155.74 THB per month, compared to the current ordering method.

Keywords:      Forecasting, Economic Order Quantity, Reorder Point