Campus Units

Supply Chain and Information Systems

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

2-5-2016

Journal or Book Title

International Journal of Production Research

Volume

54

Issue

9

First Page

2780

Last Page

2790

DOI

10.1080/00207543.2016.1142133

Abstract

A number of companies utilise end-of-use products (i.e. cores) for remanufacturing or recycling. An adequate supply of cores is needed for such activities. Establishing a purchasing policy for cores, over a finite planning horizon, requires multi-step ahead forecasts. Such forecasts are complicated by the fact that the number of cores in any future period depends upon previous sales and recent returns of the product. Distributed lag models have been used to capture this dependency for single-period ahead forecasts. We develop an approach to use distributed lag models to make multi-period ahead forecasts of net demand (i.e. demand minus returns), and investigate the cost implications, at a prescribed service level, of using such forecasts to purchase cores on a rolling horizon basis. Our results indicate that the effects of errors in the sales forecasts are negligible if sales follow an autoregressive pattern but are substantial when sales are more random. Dynamic estimation of the parameters in a rolling horizon environment yielded the most cost savings at high prescribed service levels (i.e. >0.95). Collectively, our results demonstrate the conditions in which companies can best leverage the dynamic nature of distributed lag models to reduce the acquisition costs over a finite horizon.

Comments

This accepted article is published as Clottey, T., Development and evaluation of a rolling horizon purchasing policy for cores. International Journal of Production Research, 2016 54(9); 2780-2790. doi: 10.1080/00207543.2016.1142133. Posted with permission.

Copyright Owner

Informa UK Limited

Language

en

File Format

application/pdf

Published Version

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