Application of Demand Forecasting for The Number of Truck Tire: A Case Study of Company in Laemchabang Port

Abstract

This research aims to 1) select the appropriate forecasting of truck tires: a case study of a company in Laemchabang port. 2) Analysis of economic order quantity (EOQ) to arrange the area for keeping truck tires. 3) Calculate reorder point (ROP) and compare the total cost before and after applying economic order quantity (EOQ). Demand forecasting based on the order value from January 2021 to December 2022 amounts to 24 months by nine methods with time series forecasting and selecting the most appropriate method by forecast error considering the minimized error of MAPE, MAD and MSE. The economic order quantity (EOQ) model is applied to calculate the area for keeping truck tires and reorder point (ROP) and the ordering frequency is used to compare the total cost (TC).

            The results find that the most appropriate forecasting method is Double exponential smoothing which can minimize the error by MAPE is 13.93%, MAD is 26.10 and MSE is 1038.97. Then apply this forecasting result to calculate about inventory management factor. The economic order quantity (EOQ) is 340 units per order, the Area for keeping truck tires is 99 m2, Reorder point (ROP) is 85 units, the Economic ordering is every 56 days and the ordering frequency is 7 times per year. The total cost (TC) is 100,639.33 baht per year which the last year (2022) was 436,262.10 baht per year the total cost can be reduced to 335,622.77 baht per year or 76.93%.