Case Study: Demonstration of demand forecasting under peak festive demand conditions.
Target Product: Amul Toned Milk 1 L
| Product Name: | Amul Toned Milk 1 L |
|---|---|
| Expected Demand: | 4,800 units |
| Actual Demand: | 6,150 units |
| Unfulfilled Demand: | 1,350 units |
| Lead Time ($L$): | 2 days |
| Stockout Duration: | 2 days |
| Emergency Procurement Cost: | ₹18,000 |
Stock-Out Impact Analysis
| Underestimation: | +28.1% |
|---|---|
| Shortage Ratio: | 22.0% |
2 days of stockout resulted in lost revenue on 1,350 cartons and ₹18,000 emergency procurement costs (22.0% of demand unmet, 78.0% fulfilled).
Solution Overview
1
Trend Detection
ARIMA captures peak demand shifts from historical data.
2
Safety Stock
Calculates $SS = Z \cdot \sigma \cdot \sqrt{L}$ for lead time buffer.
3
Automated ROP
Orders are placed 2 days in advance before stock hits zero.