journal article·2021-07-23Open access

Automotive OEM Demand Forecasting: A Comparative Study of Forecasting Algorithms and Strategies

Jože M. Rožanec, Blaž Kažič, Maja Škrjanc, Blaž Fortuna, Dunja Mladenić

Applied Sciences· Volume 11· Issue 15

Abstract

Demand forecasting is a crucial component of demand management, directly impacting manufacturing companies’ planning, revenues, and actors through the supply chain. We evaluate 21 baseline, statistical, and machine learning algorithms to forecast smooth and erratic demand on a real-world use case scenario. The products’ data were obtained from a European original equipment manufacturer targeting the global automotive industry market. Our research shows that global machine learning models achieve superior performance than local models. We show that forecast errors from global models can be constrained by pooling product data based on the past demand magnitude. We also propose a set of metrics and criteria for a comprehensive understanding of demand forecasting models’ performance.
Source: crossref · Quality: baseline

Research context

OpenAlex topics: Forecasting Techniques and Applications · Advanced Statistical Process Monitoring · Energy, Environment, and Transportation Policies

SciVX discovery tags are terminology-based. OpenAlex topics are source-provided classifications.

Affiliations

Jožef Stefan Institute, Jamova 39, 1000 Ljubljana, Slovenia

Qlector d.o.o., Rovšnikova 7, 1000 Ljubljana, Slovenia

Jožef Stefan International Postgraduate School, Jamova 39, 1000 Ljubljana, Slovenia

Funding

Horizon 2020 Framework Programme

References (71)

Show source-provided references
1. Cambridge University Press (2007). Cambridge Learner’s Dictionary with CD-ROM, Cambridge University Press.
2. Tactical production and distribution planning with dependency issues on the production process10.1016/j.omega.2016.04.004 ↗
3. The bullwhip effect in supply chains
4. A review of the causes of bullwhip effect in a supply chain10.1007/s00170-010-2987-6 ↗
5. Brühl, B., Hülsmann, M., Borscheid, D., Friedrich, C.M., and Reith, D. (2009). A sales forecast model for the german automobile market based on time series analysis and data mining methods. Industrial Conference on Data Mining, Springer.10.1007/978-3-642-03067-3_13 ↗
6. Mitigation of the bullwhip effect considering trust and collaboration in supply chain management: A literature review10.1007/s00170-014-6444-9 ↗
7. How does information sharing affect first-tier suppliers’ flexibility? Evidence from the automotive industry in Sweden10.1080/09537287.2017.1420261 ↗
8. Martinsson, T., and Sjöqvist, E. (2019). Causes and Effects of Poor Demand Forecast Accuracy A Case Study in the Swedish Automotive Industry. [Master’s Thesis, Chalmers University of Technology/Department of Technology Management and Economics].
9. Ramanathan, U., and Ramanathan, R. (2020). Sustainable Supply Chains: Strategies, Issues, and Models, Springer.10.1007/978-3-030-48876-5 ↗
10. Lumpy demand forecasting using neural networks10.1016/j.ijpe.2007.01.007 ↗
11. Single-hidden layer neural networks for forecasting intermittent demand10.1016/j.ijpe.2016.10.021 ↗
12. On the categorization of demand patterns10.1057/palgrave.jors.2601841 ↗
13. Another look at forecast-accuracy metrics for intermittent demand
14. Wilcoxon, F. (1992). Individual comparisons by ranking methods. Breakthroughs in Statistics, Springer.10.1007/978-1-4612-4380-9_16 ↗
15. Stock control with sporadic and slow-moving demand10.1057/jors.1984.185 ↗
16. Forecasting for items with intermittent demand10.1057/jors.1996.10 ↗
17. Income’s effect on car and vehicle ownership, worldwide: 1960–201510.1016/S0965-8564(98)00026-3 ↗
18. Using adaptive network-based fuzzy inference system to forecast automobile sales10.1016/j.eswa.2011.02.100 ↗
19. A Sales Forecasting Model in Automotive Industry using Adaptive Neuro-Fuzzy Inference System (Anfis) and Genetic Algorithm (GA)
20. A study of car demand and its interdependency in sarawak10.33736/ijbs.3307.2020 ↗
21. Sales forecast of an automobile industry
22. Chinese automobile sales forecasting using economic indicators and typical domestic brand automobile sales data: A method based on econometric model10.1177/1687814017749325 ↗
23. Kwan, H.W. (1991). On the Demand Distributions of Slow-Moving Items. [Ph.D. Thesis, University of Lancaster].
24. Eaves, A.H.C. (2002). Forecasting for the Ordering and Stock-Holding of Consumable Spare Parts. [Ph.D. Thesis, Lancaster University].
25. On the demand distributions of spare parts10.1080/00207543.2011.562561 ↗
26. Spare parts management: Linking distributional assumptions to demand classification10.1016/j.ejor.2013.12.043 ↗
27. A business intelligence technique for forecasting the automobile sales using Adaptive Intelligent Systems (ANFIS and ANN)
28. Demand forecasting for production planning in remanufacturing10.1007/s00170-015-6787-x ↗
29. Farahani, D.S., Momeni, M., and Amiri, N.S. (2016, January 9–13). Car sales forecasting using artificial neural networks and analytical hierarchy process. Proceedings of the Fifth International Conference on Data Analytics: DATA ANALYTICS 2016, Venice, Italy.
30. Henkelmann, R. (2018). A Deep Learning based Approach for Automotive Spare Part Demand Forecasting. [Master Thesis, Otto von Guericke Universitat Magdeburg].
31. Chandriah, K.K., and Naraganahalli, R.V. (2021). RNN/LSTM with modified Adam optimizer in deep learning approach for automobile spare parts demand forecasting. Multimed. Tools Appl., 1–15.10.1007/s11042-021-10913-0 ↗
32. Forecasting Car Demand in Indonesia with Moving Average Method
33. Neural network forecasting for seasonal and trend time series10.1016/j.ejor.2003.08.037 ↗
34. The tourism forecasting competition10.1016/j.ijforecast.2010.04.009 ↗
35. Montero-Manso, P., and Hyndman, R.J. (2020). Principles and algorithms for forecasting groups of time series: Locality and globality. arXiv.10.1016/j.ijforecast.2021.03.004 ↗
36. DeepAR: Probabilistic forecasting with autoregressive recurrent networks10.1016/j.ijforecast.2019.07.001 ↗
37. Forecasting across time series databases using recurrent neural networks on groups of similar series: A clustering approach10.1016/j.eswa.2019.112896 ↗
38. Laptev, N., Yosinski, J., Li, L.E., and Smyl, S. (2017, January 6–11). Time-series extreme event forecasting with neural networks at uber. Proceedings of the International Conference on Machine Learning, Sydney, Australia.
39. Wirth, R., and Hipp, J. CRISP-DM: Towards a standard process model for data mining. Proceedings of the 4th International Conference on the Practical Applications of Knowledge Discovery and Data Mining.
40. Wang, C.N., Tibo, H., and Nguyen, H.A. (2020). Malmquist productivity analysis of top global automobile manufacturers. Mathematics, 8.10.3390/math8040580 ↗
41. Micro-work, artificial intelligence and the automotive industry10.1007/s40812-019-00121-1 ↗
42. What and how are we sharing? A systematic review of the sharing paradigm and practices10.1007/s11625-018-0638-2 ↗
43. An innovative car sharing technological paradigm towards sustainable mobility10.1016/j.jclepro.2020.125626 ↗
44. From novelty to normality: Reproducing car-sharing practices in transitions to sustainable mobility
45. Heineke, K., Möller, T., Padhi, A., and Tschiesner, A. (2017). The Automotive Revolution is Speeding Up, McKinsey and Co.
46. Verevka, T.V., Gutman, S.S., and Shmatko, A. (2019, January 14–15). Prospects for Innovative Development of World Automotive Market in Digital Economy. Proceedings of the 2019 International SPBPU Scientific Conference on Innovations in Digital Economy, Saint Petersburg, Russia.10.1145/3372177.3373320 ↗
47. Sales forecasts for existing consumer products and services: Do purchase intentions contribute to accuracy?10.1016/S0169-2070(00)00058-3 ↗
48. When do purchase intentions predict sales?10.1016/j.ijforecast.2007.05.015 ↗
49. The effect of aggregation on prediction in autoregressive integrated moving-average models10.1111/j.1467-9892.1993.tb00143.x ↗
50. Effects of temporal aggregation on estimates and forecasts of fractionally integrated processes: A Monte-Carlo study10.1016/S0169-2070(03)00066-9 ↗
51. Demand forecasting by temporal aggregation10.1002/nav.21546 ↗
52. An aggregate–disaggregate intermittent demand approach (ADIDA) to forecasting: An empirical proposition and analysis10.1057/jors.2010.32 ↗
53. Syntetos, A., Babai, M., and Altay, N. (2010, January 10–12). Modelling spare parts’ demand: An empirical investigation. Proceedings of the 8th International Conference of Modeling and Simulation MOSIM, Hammamet, Tunisia.
54. Optimal number of features as a function of sample size for various classification rules10.1093/bioinformatics/bti171 ↗
55. Varma, S., and Simon, R. (2006). Bias in error estimation when using cross-validation for model selection. BMC Bioinform., 7.10.1186/1471-2105-7-91 ↗
56. Drucker, H., Burges, C.J., Kaufman, L., Smola, A.J., and Vapnik, V. (1997, January 2–5). Support vector regression machines. Proceedings of the Advances in Neural Information Processing Systems, Denver, CO, USA.
57. The perceptron: A probabilistic model for information storage and organization in the brain10.1037/h0042519 ↗
58. Ridge regression: Biased estimation for nonorthogonal problems10.1080/00401706.1970.10488634 ↗
59. Regression shrinkage and selection via the lasso10.1111/j.2517-6161.1996.tb02080.x ↗
60. Regularization and variable selection via the elastic net10.1111/j.1467-9868.2005.00503.x ↗
61. An introduction to kernel and nearest-neighbor nonparametric regression10.1080/00031305.1992.10475879 ↗
62. Stacked generalization10.1016/S0893-6080(05)80023-1 ↗
63. Gomes, H.M., Barddal, J.P., Ferreira, L.E.B., and Bifet, A. (2018, January 2–4). Adaptive random forests for data stream regression. Proceedings of the European Symposium on Artificial Neural Networks, Computational Intelligence and Machine Learning (ESANN), Bruges, Belgium.
64. Domingos, P., and Hulten, G. (2000, January 20–23). Mining high-speed data streams. Proceedings of the Sixth ACM SIGKDD International Conference on Knowledge Discovery and Data Mining, Boston, MA, USA.10.1145/347090.347107 ↗
65. Bifet, A., and Gavaldà, R. (2009). Adaptive learning from evolving data streams. International Symposium on Intelligent Data Analysis, Springer.10.1007/978-3-642-03915-7_22 ↗
66. Ferligoj, A., and Kramberger, A. (1995). Some Properties of R 2 in Ordinary Least Squares Regression.
67. Illusions in regression analysis10.1016/j.ijforecast.2012.02.001 ↗
68. Tufte, E.R. (2001). The Visual Display of Quantitative Information, Graphics Press.
69. Forecast errors and inventory performance under forecast information sharing10.1016/j.ijforecast.2010.08.003 ↗
70. Demand forecasting under fill rate constraints—The case of re-order points10.1016/j.ijforecast.2020.01.007 ↗
71. Cross-validatory choice and assessment of statistical predictions10.1111/j.2517-6161.1974.tb00994.x ↗