Forecasting of Optimum Raw Material Inventory Level using Artificial Neural Network
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Alizadeh, Syed Mithun, Paul, SK, Ahsan, Kamrul and Azeem, Abdullahil (2011) Forecasting of Optimum Raw Material Inventory Level using Artificial Neural Network. International Journal of Operations and Quantitative Management, 17 (4). pp. 333-348. ISSN 1082-1910
Abstract
This paper develops an artificial neural network (ANN) model to forecast the optimum level of raw materials inventory as a function of product demand, manufacturing lead-time, supplier reliability, material holding cost, and material cost. The model selects a feed-forward back-propagation ANN with twelve hidden neurons as the optimum network. We test the model with pharmaceutical company data. The results show that the model can be useful to forecast raw material inventory level in response to different parameters. We also compare the model with fuzzy inference system (FIS) and simple economic order quantity (EOQ). It can be seen that ANN model outperforms others. Overall, the model can be applied for forecasting of raw materials inventory for any manufacturing enterprise in a competitive business environment.
| Item type | Article |
| URI | https://vuir.vu.edu.au/id/eprint/9367 |
| Subjects | Historical > FOR Classification > 0806 Information Systems Historical > FOR Classification > 1503 Business and Management Historical > Faculty/School/Research Centre/Department > School of Management and Information Systems |
| Keywords | ResPubID24239, raw material inventory, artificial neural network, forecasting, economic order quantity |
| Citations in Scopus | 12 - View on Scopus |
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