School Of Business

PROJECT REPORT

“ANALYSIS AND PREDICTION OF SHIPMENT LOAD IN

FESTIVE SEASONS”.

IN

SAFEXPRESS AMBALA

For The Partial Fulfillment of the Requirement for the Degree Of

“MASTER OF BUSINESS AND ADMINISTRATION”

SUBMITTED TO:

SCHOOL OF BUSINESS

ITM UNIVERSITY, GWALIOR (M.P)

SUBMITED BY:

SIDDHARTH BOLE

M.B.A (SCM) (6th tri-sem)

ROLL NO- MBAN1MG15085

2

DECLARATION

I Siddharth bole (MBAN1MG15085) student of MBA (SCM) VIth trimester, hereby

declare that I have submitted my report on “Analysis and prediction of

shipment load in festive seasons. This report is submitted by me under the

guidance of Mr. Ankit Singh, Mr. S.K.Yadav, and Prof. Somen Mitra (H.O.D) of

ITM University. I have submitted this report for the partial fulfillments of the VI th

Trimester of MBA (SCM).

SIGNATURE

Siddharth bole

(MBAN1MG15085)

3

CERTIFICATE

This is to certify that Siddharth bole (MBAN1MG15085) student of MBA

(SCM) VIth trimester has submitted his report on “Analysis and prediction

of shipment load in festive seasons. For the partial fulfillment of the VIth

trimester of MBA (SCM) and submitted a satisfactory report of the Project.

This work has not been submitted in part or full to this or any other

university for the award of any degree or diploma to the best of knowledge.

We wish them success in the future.

Signature

Prof. Somen Mitra

(H.O.D)

4

ACKNOWLEDGEMENT

Thanking is formality and sometimes a necessity, nevertheless an essential part of

any project report. The list of expression of thanks no matter how extrusive is

always in complete and inadequate. This acknowledgement is no exception.

One of the best parts of writing a project report is the opportunity to thank those

who have contributed to it. This project report has been made possible through

direct and indirect co-operation of mentors. I especially with to acknowledge the

following people who reviewed the project. Thanks for the most perspective and

helpful comments.

I sincerely thank to “Mr. Ankit Singh, Mr. S.k.Yadav” for his support and

Valuable Guidance & also express my gratitude for his precious help during the

entire training session.

5

TABLE OF CONTENTS

1. INTRODUCTION TO LOGISTICS

• Objective of study

• Scope of the study

• Meaning of logistics

• Origin and definition of logistics

• Importance of logistics management

• Logistics management and supply chain

2. BACKGROUND OF SAFEXPRESS

• The company profile

• History of SAFEXPRESS

• Mission, vision of SAFEXPRESS

• Type of business

• Service of SAFEXPRESS

.

3. ANALYSIS AND PREDICTION OF SHIPMENT LOAD IN

FESTIVE SEASONS • Research methodology • Time series analysis.

4. CONCLUSION.

5. BIBLIOGRAPHY.

6

INTRODUCTION TO

LOGISTICS

7

OBJECTIVE OF THE STUDY

The objectives of the Project are: PRIMARY OBJECTIVES

● Analysis and prediction of shipment load in festive seasons.

SECONDARY OBJECTIVE

● To know about Logistics Industries

● To know whether the customers are satisfied with the existing range of service pattern.

SCOPE OF THE STUDY:

In order to understand the concepts of logistics in terms of practical usage and to glimpse

into the how a real company or organization uses logistics as a formidable tool to gain

customer satisfaction, reduce overall cost and increase efficiency I selected

“SAFEXPRESS” the India leading courier Service Company. The study is done only how

SAFEXPRESS use logistics system effectively. There are following strength and weakness of

SAFEXPRESS.

COMPANY STRENGTHS

Credit & Retail basis pricing strategy

Good brand presence in India

It has great amount of Creative Service ideas

“Largest Logistics service Provider in India” by Limca Book of Records in 2002

Has a reach to all 627 districts in 35 states and union territories in India

It has more than 3600 GPS-equipped all-weather proof, containerized vehicles

COMPANY WEAKNESSES

Marketing and advertising is lesser than global brands

Lower adoption of advanced technology

8

COMPANY OPPORTUNITIES

Diversification in more innovative services

Increasing firms in manufacturing industry

It has 3600 weather proof ISO-9002 vehicles which can be used for increasing range of

services.

COMPANY THREATS

Big competitors with advanced technology

Unorganized transportation sector

Entry and penetration of international players and domestic players

9

INTRODUCTION

MEANING OF LOGISTICS:

Logistics is concerned with getting the products and services where they are needed and when

they are desired. It is difficult to accomplish any marketing or manufacturing without logistical

support. It involves the integration of information, transportation, inventory, warehousing,

material handling, and packaging.

The operating responsibility of logistics is the geographical repositioning of raw materials, work

in process, and finished inventories where required at the lowest cost possible. Logistics is

practiced for ages since organized activity began. Without logistics support no activity can be

performed to meet defined goal. The current challenge is to perform logistics scientifically in

order to optimize benefits to the organization. Logistics is a planning function of management.

Logistics function is concerned with taking products and services where they are needed and

when they are needed.

LOGISTICS MANAGEMENTS:

Logistics management is that part of the supply chain which plans, implements and controls the

efficient, effective, forward and backward (reverse) flow and storage of goods, services and

information between the point of origin and the point of consumption in order to meet customers'

requirements rather to the customers’ delight. A professional working in the field of logistics

management is called a logistician.

Logistics, as a business concept, evolved only in the 1950s. This was mainly due to the increasing

complexity of supplying one's business with materials, and shipping out products in an

increasingly globalize supply chain, calling for experts in the field who are called Supply Chain

Logisticians. This can be defined as having the right item in the right quantity at the right time at

the right place for the right price and to the right target customers (consumer); and it is the

10

science of process having its presence in all sectors of the industry. The goal of logistics work is

to manage the fruition of project life cycles, supply chains and resultant efficiencies. Logistics is

Concerned with getting (or transmitting) the products and services where they are needed or

when they are desired. It is difficult to accomplish any marketing or manufacturing without

logistical support. It involves the integration of information, transportation, inventory,

warehousing, material handling, and packaging. The operating responsibility of logistics is the

geographical repositioning of raw materials, work in process, and finished inventories where

required at the lowest cost possible.

ORIGIN & DEFINITION OF LOGISTICS:

The term "logistics" originates from the ancient Greek "Zóyoç" ("logos"—"ratio, word,

calculation, reason, speech, oration"). Logistics is considered to have originated in the military's

need to supply themselves with arms, ammunition and rations as they moved from their base to a

forward position. In ancient Greek, Roman and Byzantine empires, there were military officers

with the title ‘Logistics’ who were responsible for financial and distribution of supplies.

The Oxford English dictionary defines logistics as: “The branch of military science having to

do with procuring, maintaining and transporting material, personnel and facilities.”

The American Council of Logistics Management defines logistics as” the process of planning,

implementing and controlling the efficient and effective flow, and storage of goods, services and

related information from the point of origin to the point of consumption for the Purpose of

conforming to customer requirements.”

IMPORTANCE OF LOGISTICS MANAGEMENTS:

Logistics is the bed rock of trade and business.

Without selling and or buying there can be no trade and business. Buying and or selling

takes place only when goods are physically moved into and or away from the market.

Take away logistical support trade and business will collapse

Integrates logistical activities

In conventional management environment, various activities of logistics work in isolation

under different management functions. Each pocket trying to sub optimizes its objectives at

the cost of overall organizational objectives. Purchasing trying to purchase at minimum

price at the cost of what is needed by operations. Operations produce large quantities at

minimum production cost ignoring demand leading to doom inventory. Logistics function

of management brings all such functions under one umbrella pulling down inter

departmental barriers.

11

Competitive edge:

In the fiercely competitive environment logistics provides the edge. Due to technological

revolution most of the products are moving into commodity markets. In a commodity

market where price is controlled by competition, where there is no product differentiation

in terms of quality parameters like performance & reliability, where brands are almost

irrelevant, competitive edge is that of availability of product and service in terms of time,

place and quantity.

Leads to customer satisfaction

Through superior customer service. Organizational objectives of P [Productivity],Q

[Quality],C [Cost],D [Delivery],E [Employee Morale],F [Flexibility],S [Safety],H

[Health],E [Environment] are set to meet customer expectations.

Supports critical functions like operations and marketing

Strong logistics support enables a company to move towards JUST IN TIME production

system for survival in a highly competitive market

LOGISTICS MANAGEMENTS AND SUPPLY CHAIN:

SCM and logistics management, the definitions made by the Council of Supply Chain

Management Professionals, CSCMP (former Council of Logistics Management, CLM)

SCM is defined as “Supply chain management encompasses the planning and

management of all activities involved in sourcing and procurement, conversion, and

all Logistics Management activities. Importantly, it also included coordination and

collaboration with channel partners, which can be suppliers, intermediaries, third-party

service providers, and customers. In essence, Supply Chain Management integrates

supply and demand management within and across companies “Supply chains

encompass the companies and the business activities needed to design RFDn, make,

deliver, and use a product or service. Businesses depend on their supply chains to

provide them with what they need to survive and thrive. Every business fits into one or

more supply chains and has a role to play in each of them. The pace of change and the

uncertainty about how markets will evolve has made it increasingly important for

companies to be aware of the supply chains they participate in and to understand the

roles that they play. Those companies that learn how to build and participate in strong

supply chains will have a substantial competitive advantage in their markets. Supply

chain management is the coordination of production, inventory, location, and

transportation among the participants in a supply chain to achieve the best mix of

responsiveness and efficiency for the market being served. There is a difference between

12

the concept of supply chain management and the traditional concept of logistics.

Logistics typically refers to activities that occur within the boundaries of a single

organization and supply chains refer to networks of companies that work together and

coordinate their actions to deliver a product to market. Also traditional logistics focuses

its attention on activities such as procurement, distribution, maintenance, and inventory

management. Supply chain management acknowledges all of traditional logistics and also

includes activities such as marketing, new product development, finance, and customer

service. In the wider view of supply chain thinking, these additional activities are now

seen as part of the work needed to fulfill customer requests. Effective supply chain

management requires simultaneous improvements in both customer service levels and

the internal operating efficiencies of the companies in the supply chain. Customer

service at its most basic level means consistently high order fill rates, high on-time

delivery rates, and a very low rate of products returned by customers for whatever

reason. Internal efficiency for organizations in a supply chain means that these

organizations get an attractive rate of return on their investments in inventory and other

assets and those they find ways to lower their operating and sales expenses.

13

BACKGROUND OF

SAFEXPRESS

14

COMPANY PROFILE

Safexpress have a Integrated Logistics Management. It is our 3PL Product that

optimizes your company’s supply chain. First, we examine the linkages between your

suppliers, producers, buyers, intermediaries and end users in order to identify time and

cost inefficiencies. Next, we deploy our unique mix of local know-how, global practices

and cutting-edge technology to provide integrated supply chain solutions. These range

from specific services such as warehouse management, statutory compliance and

invoicing - to an entire gamut of third party logistics services.

Safexpress works and carries on the philosophy of 'Custodians First

Carriers Later’. We sincerely abide by our corporate philosophy on the subject.

Safexpress has an all risks cover - Carrier’s Risk offer, which unburdens the customer

of his worries of losses in transit. On minimal extra charge of Risk Charges, we cover

your valuable shipment against all sorts of transit losses including fire, flood, damage,

accident, shortage, etc.

The Latest of the material handling equipment are used at Safexpress' hubs to ensure

safety and remove Laxity from material handling. Equipment including hydraulic hand

pallet trucks, dock levelers, trolleys, fork lifts’ multilevel pallet stackers are used by

Safexpress. Chain Pulleys and Cranes handle consignments which are not possible by

smaller equipment’s to man oeuvre.

It might not be out of place to mention here all the hubs of Safexpress are on platform

level height. Any Logistician will understand and appreciate the essentiality and

importance platform level warehouses have for material handling.

15

Pawan Jain

Chairman and Managing Director

Safexpress

Anil Sayal

General Manager

Safexpress

Safexpress started its business as a door-to-door service in 1995 with 4 routes, 9

offices, 12 container mounted vehicles and 20 employees.

Safexpress' door-to-door services include niche products like DOD and To-Pay

freight.

After one year i.e. in 1996 Safexpress opens super hubs at Delhi, Mumbai and

Bangalore.

Next year Safexpress launches Integrated Logistics Services. Our first ILS client is NIIT;

the first international ILS account is signed with Hilt from Europe. Spurred on by a

surging domestic economy, Safexpress extends its fleet to 250 and number of stations to

290. Safexpress Private Limited emerges as an independent entity

16

Then in 1998 Safe air and Safe box are launched, setting a new standard in value added

cargo services. All hubs are connected through web-based software. In 1999 having

grown by over 300%in 4 years without compromising quality, Safexpress is awarded the

Golden Peacock Award for quality and innovation in Logistics Management.

In 2000 Pilot run for GPS starts on 28 routes. Also Safexpress reaches the 350-

destinations mark and the fleet crosses 1400. Again 2001 Safexpress upgrades and

launches a whole lot of features on www.safexpress.com including ePod, Virtual Cargo

and Privileged Member.

In the year 2002, 2003 Safexpress was declared India's "Largest Logistics Service

Provider" by Limca Book of Records. In 2005 Safexpress bags the MICO: Power of We

Award for excellent service in logistics. In the same year Safexpress fleet crosses 3000

mark.

Next year in 2006 Safexpress was awarded by ADC Krone for providing best

logistics services and in same year Safexpress bags prestigious RAI's (Retailers

Association of India) Award for Best Logistics Service Provider.

HISTORY AND BACKGROUND OF SAFEXPRESS

1995 Safexpress launches as a door-to-door service with 4 routes, 9 offices, 12

container mounted vehicles and 20 employees.

Safexpress' door-to-door services include niche products like DOD and

To-Pay freight.

1996 Safexpress opens super hubs at Delhi, Mumbai and Bangalore.

1997 Safexpress launches Integrated Logistics Services. Our first ILS client is

NIIT, the first international ILS account is signed with Hilti from Europe.

Spurred on by a surging domestic economy, Safexpress extends its Fleet to 250

and number of stations to 290.Safexpress Private Limited emerges as an

independent entity.

1998 Safe air and Safe box are launched, setting a new standard in value added

cargo services. All hubs are connected through web-based software.

17

1999 Having grown by over 300% in 4 years without compromising quality,

Safexpress is awarded the Golden Peacock Award for quality and innovation in Logistics Management.

2000 Pilot run for GPS starts on 28 routes.

Safexpress reaches the 350-destinations mark and the fleet crosses 1400.

2001 Safexpress upgrades and launches a whole lot of features on

www.safexpress.com including ePod, Virtual Cargo and Privileged Member.

2002 Safexpress declared India’s “Largest Logistics Service

Provider”

By Limca Book of Records 2002.

2003 Safexpress declared India’s “Larges Logistics Service

Provider” by Limca Book of Records 2003.

Mr. Pawan Jain, CMD, Safexpress, becomes one of the finalists in the prestigious

Envy’s Entrepreneur of the year Award.

2004 Safexpress inaugurated its 500th scheduled delivery location Safexpress

bags the Franchise Awards04 for excellence in Team Work.

2005 Safexpress bags the MICO:Power of We Award for excellent service in

logistics

Safexpress fleet crosses 3000 mark.

2006 Safexpress awarded by ADC Krone for providing best logistics Services.

Safexpress bags prestigious RAI’s (Retailers Association of India) Award for

Best Logistics Service Provider.

MISSION, VISION & QUALITY OF SAFEXPRESS

MISSION

We shall adopt and internalize a work culture which demonstrates a "we can we will"

attitude to reflect in our daily responsibilities so as to far exceed our objectives,

consistently striving towards market dominance. We will create historical landmarks

forming a strong edifice for the future overcoming all obstacles pro-actively as our

personal responsibility and commitment to create delight for the customer with

impeccable personalized services.

18

VISION

To be a conscious learning organization maintaining flexibility for change so as to

provide the most customized solutions. Striving towards global market share whilst

maintaining dominance in the domestic market through good HR practice and

excellent customer service.

QUALITY

“A quality service relies upon constant customer interaction and feedback.

An immediate response to the changing environment with pre-defined business processes

managed effectively and efficiently leads to the highest output from the lowest input and

this is the strongest measure of quality. The best certification of a quality organization is

the measurement of the scale of the smile on the customers face”

TYPE OF BUSINESS

Indian Economic Scenario today marks the emergence of total chaotic market with lot

of competitors, piling stock of products, lowering margins, taxation changes and more.

In the present situation what is needed to see the blue?

The ‘way to higher profits’ comes from streamlining the channels and outsourcing the

segment of business which is not the core focus or expertise of the company.

One such fragment of business model is Supply Chain. Being a medium of linking

product to market, a robust model of supply chain management ensures a better ‘TAT’

(turnaround time), low inventory holding cost and less of damages.

Over the time discipline of business logistics has advanced from the warehouse and

transportation dock to the boardroom of leading Global Enterprises.

Supply Chain has to be viewed not only as material and information pipeline but as

integration of logistics with the human factors that need more attention to be paid to

understanding, creating and managing demand more effectively.

Safexpress works on the Value Chain concept using a framework for examining

linkages between suppliers, producers, buyers, intermediaries and end users.

Safexpress, India’s leading logistics company offers Integrated Logistics Management,

Express, Air, Multi-modal, Door-to-Door, time definite delivery and consultancy

services. The company also offers e-logistics and customized solutions for e-business.

19

SAFEXPRESS SERVICES

➢ EXPRESS

Safexpress service is an express service which involves movement of cargo in all-

weather proof sealed containers on feeder and express routes. The service is time definite

with a published transit schedule covering more than 550 destinations nationwide and

provides the flexibility for surface, air and multi-modal connectivity with a wide reach

associated with Indian airlines and air taxi operators such as jet airways, Sahara etc.

➢ DRAFT-ON-DELIVERY

Draft on delivery is an unparalleled value-added service wherein the seller can dispatch

goods through Safexpress to the buyer and be assured that the delivery would take place

only when the draft has been collected.

In the Safexpress DOD system pre-alerts are sent to the consignee to allow reasonable

time for the draft to be made, thus meeting the desired objective of express transit with

the amount ready for collection.

➢ ALL RISK COVER

The management of Safexpress hereby undertakes and declares that:

“The company would redeem the value of the loss in the uneventful case of any shortage

or damage to the consignment whilst in the custody of Safexpress, subject to the risk

charge having been paid by the sender or the recipient as per the company policy. The

amount corresponding to the loss as declared would be paid by the company to the

sender or the recipients as required without waiting for any request for the same.”

➢ SAFEBOX

The safe box comes in two convenient sizes of 17” x 17” x 12” and 16” x 12” x 9” easily

accommodating up to 20 & 10 kgs respectively of your cargo.

The robust design is further reinforced with internal insulation for safety of your cargo.

So you save on packaging cost and for a nominal amount it is ready for delive ry with an

auto insurance up to Rs. 5000 absolutely free of cost.

➢ SAFEAIR

To ensure that time sensitive cargo reaches the destination through a faster mode meeting

all your requirements for the time definite deliveries. Safe air connects your cargo

through airlines, Atos and uses the services for morning and evening flights to provide a

wide variety of connectivity to suit different market cutoffs.

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➢ ILM

Safexpress works on the value chain concept using a framework for examining linkages

between suppliers, producers, buyers, intermediaries & end users.

Safexpress ensures the success of the entire chain, marrying local knowhow with the

best global practices, technology & perspective

➢ CONSULTING

Safexpress offers value added services beyond physical operations in the form of

logistics consultancy covering a wide spectrum of the Indian economy.

The company plays a pivotal role in guiding diverse market segments on existing and

recommended logistics models with various simulation modules to map transactions

using historical data and providing befitting supply chain solutions.

21

Analysis and prediction of shipment load

in festive seasons.

Research methodology (Forecasting through time series analysis)

The Role of Forecasting in a Supply Chain

Demand forecasts form the basis of all supply chain planning. Consider the

push/pull view of the supply chain.

All push processes in the supply chain are performed in anticipation of

customer demand, whereas all pull processes are performed in response to

customer demand.

For push processes, a manager must plan the level of activity, be it

production, transportation, or any other planned activity. For pull processes, a

manager must plan the level of available capacity and inventory but not the

actual amount to be executed. In both instances, the first step a manager must

take is to forecast what customer demand will be.

Forecasting is a vital function and affects every significant management

decision.

Finance and accounting use forecasts as the basis for budgeting and cost

control.

Marketing relies on forecasts to make key decisions such as new product

planning and personnel compensation.

Production uses forecasts to select suppliers; determine capacity

requirements; and drive decisions about purchasing, staffing, and inventory.

22

CHARACTERISTICS OF FORECASTS

Forecasts are always inaccurate and should thus include both the expected

value of the forecast and a measure of forecast error.

Long-term forecasts are usually less accurate than short-term forecasts.

Aggregate forecasts are usually more accurate than disaggregate forecasts.

In general, the farther up the supply chain a company is (or the farther it is

from the consumer), the greater is the distortion of information it receives.

COMPONENTS OF FORECAST

Consists of two components: (a) Systematic & (b) random component.

• Systematic component consists of

(i) Level (current depersonalized demand),

(ii) Trend (growth or decline in demand),

(iii) Seasonality (predictable seasonal fluctuation in demand)

• Random component is that part of the forecast that cannot be explained by the

historical demand patterns.

Observed demand=systematic component + random component

FACTORS are related to the demand forecast: Past Demand, Lead time of

product replenishment, Planned Advertising or Marketing efforts, Planned

Price discounts, State of the Economy, Actions that competitors have taken.

23

Types of Forecasting

There are two types of forecasting methods.

1. Qualitative & 2. Quantitative

Qualitative: Qualitative forecasting methods are primarily subjective and rely

on human judgment.

Jury of executive opinion method: Involves securing opinions from a group

of expert’s on expected future sales and combining them into the estimate of

future sales.

• Quick and relatively inexpensive method.

• Applicable for finding out the forecast demand of both new as well as

existing products.

• Based on subjective judgment of experts and hence suffers from the biases

of experts.

Delphi method: Involves eliciting responses from a panel of experts and

proceeds through a series of rounds. Choose the experts to participate

24

representing a variety of knowledgeable people in different areas

Through a questionnaire (or E-mail), obtain forecasts (and any premises or

qualifications for the forecasts) from all participants

Summarize the results and redistribute them to the participants along with

appropriate new questions

Summarize again, refining forecasts and conditions, and again develop new

questions

Repeat Step 4 as necessary and distribute the final results to all participants

Causal: Causal forecasting methods assume that the demand forecast is

highly correlated with certain factors in the environment (the state of the

economy, interest rates, etc.). Causal forecasting methods find this correlation

between demand and environmental factors and use estimates of what

environmental factors will be to forecast future demand.

Simulation: Simulation forecasting methods imitate the consumer choices

that give rise to demand to arrive at a forecast. Using simulation, a firm can

combine time-series and causal methods to answer such questions as: What

will be the impact of a price promotion? What will be the impact of a

competitor opening a store nearby?

Basic Approach to Demand Forecasting

1. Understand the objective of forecasting.

2. Integrate demand planning and forecasting throughout the supply chain.

3. Identify the major factors that influence the demand forecast.

4. Forecast at the appropriate level of aggregation.

5. Establish performance and error measures for the forecast.

25

Time Series Analysis

Time series forecasting models try to predict the future based on

past data

Forecasting

Method

Amount

of

Historica

l Data

Data

Pattern

Forecast

Horizon

Simple

moving

average

6 to 12

months;

weekly

data are

often

used

Stationary

(i.e., no

trend or

seasonality

)

Short

Weighted

moving

average and

simple

exponential

smoothing

5 to 10

observati

ons

needed

to start

Stationary Short

Exponential

smoothing

with trend

5 to 10

observati

ons

needed

to start

Stationary

and trend Short

Linear

regression

10 to 20

observati

ons

Stationary,

trend, and

seasonality

Short to

medium

26

SIMPLE MOVING AVERAGE FORMULA

• It is one of the most popular methods for calculating Long Term

Trend. This method is also used for ‘Seasonal fluctuation’, ‘cyclical

fluctuation’ & ‘irregular fluctuation’. In this method we calculate the

‘Moving Average for certain Weeks.

• n

A+...+A +A +A =F n-t3-t2-t1-t

t

• Ft = Forecast for the coming period

• N = Number of periods to be averaged

• A t-1 = Actual occurrence in the past period for up to “n” periods.

27

The data has been taken from Ambala HUB

Actual Dep

Total demand in Pkg Actual Wt Chg Wt

Week1 31989 466470 513590

Week2 28844 458244 521328

Week3 31069 451192 503378

Week4 31165 450398 509632

Week5 32023 467142 529356

Week6 29810 448107 492103

Week7 39729 521330 588900

Week8 28681 426843 474916

Week9 27059 363636 401957

Week10 32912 437180 492955

Week11 31482 451169 515252

Week12 34254 470223 519742

Week13 28261 415815 464066

Week14 33275 482692 534110

Week15 34104 483214 537222

Week16 22147 334889 374323

Week17 33257 477366 522337

Week18 28685 401284 452339

Week19 37614 514268 575201

Week20 30195 445836 503775

Week21 37554 513576 581578

Week22 33901 448279 501152

Week23 25090 326238 367063

Week24 33023 455956 509682

Week25 32801 435323 487836

Week26 33781 471483 524425

Week27 38901 521869 591226

Week28 36043 509597 576829

Week29 29030 448823 505154

Week30

23933 335625 384251

Data of Ambala HUB

28

SIMPLE MOVING AVERAGE FORMULA

• n

A+...+A +A +A =F n-t3-t2-t1-t

t

Actual Dep Total demand in Pkg forecasting for 3 days)

Week 1 31989

Week2 28844

Week3 31069

Week4 31165 30634

Week5 32023 30359

Week6 29810 31419

Week7 39729 30999

Week8 28681 33854

Week9 27059 32740

Week10 32912 31823

Week11 31482 29551

Week12 34254 30484

Week13 28261 32883

Week14 33275 31332

Week15 34104 31930

Week16 22147 31880

Week17 33257 29842

Week18 28685 29836

Week19 37614 28030

Week20 30195 33185

Week21 37554 32165

Week22 33901 35121

Week23 25090 33883

Week24 33023 32182

Week25 32801 30671

Week26 33781 30305

Week27 38901 33202

Week28 36043 35161

Week29 29030 36242

Week30 23933 34658

29

In this Case we can see that forecasting demand is more smother then

actual demand.

WEIGHTED MOVING AVERAGE FORMULA

05000

1000015000200002500030000350004000045000

wee

k1

wee

k2

wee

k3

wee

k4

wee

k5

wee

k6

wee

k7

wee

k8

wee

k9

wee

k10

wee

k11

wee

k12

wee

k13

wee

k14

wee

k15

wee

k16

wee

k17

wee

k18

wee

k19

wee

k20

wee

k21

wee

k22

wee

k23

wee

k24

wee

k25

wee

k26

wee

k27

wee

k28

wee

k29

wee

k30

comparision b/w actual demand and forcasted demand

Total demand in Pkg forcasting for 3 weeks)

While the moving average formula implies an equal

weight being placed on each value that is being averaged, the weighted moving average permits an

unequal weighting on prior time periods

30

The formula for the moving average is:

n-tn3-t32-t21-t1t Aw+...+Aw+A w+A w=F

wt. = weight given to time period “t” occurrence (weights must add to

one) 1=w

n

1=i

i

And I have assumed the weight because it was not mentioned in the Data.

assumed Weight:

t-1 0.5

t-2 0.3

t-3 0.2

31

weighted moving Average method

Actual Dep Total demand in Pkg forecast 3 weeks

week1 31989

week2 28844

week3 31069

week4 31165

week5 32023 30672

week6 29810 31575

week7 39729 30745

week8 28681 35212

week9 27059 32221

week10 32912 30080

week11 31482 30310

week12 34254 31026

week13 28261 33154

week14 33275 30703

week15 34104 31967

week16 22147 32687

week17 33257 27960

week18 28685 30093

week19 37614 28749

week20 30195 34064

week21 37554 32119

week22 33901 35358

week23 25090 34256

week24 33023 30226

week25 32801 30819

week26 33781 31325

week27 38901 33335

week28 36043 36145

week29 29030 36448

week30 23933 33108

32

In this total demand is less smother then the forecasted demand but it is

less smother then the simple moving average method.

EXPONENTIAL SMOOTHING MODEL

constant smoothing Alpha

period epast t tim in the occurance ActualA

period past time 1in alueForecast vF

period t timecoming for the lueForcast vaF

:Where

1-t

1-t

t

Premise: The most recent observations might have the highest predictive value

Therefore, we should give more weight to the more recent time periods when

forecasting

0

5000

10000

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20000

25000

30000

35000

40000

45000

weighted moving Average method Total demand in Pkg

weighted moving Average method forecast 3 weeks

33

Exponential

Smoothing

Model

Ft=Ft-1+α(At-1 -Ft-1) F1=D1

forecast 3 weeks α=.1 α=.6

Actual Dep Total demand in Pkg

0.1 0.6

f1 week1 31989

31989 31989

f2 week2 28844

31989 31989

f3 week3 31069

31675 30102

f4 week4 31165

31614 30682

f5 week5 32023 30672 31569 30972

f6 week6 29810 31575 31614 31603

f7 week7 39729 30745 31434 30527

f8 week8 28681 35212 32264 36048

f9 week9 27059 32221 31905 31628

f10 week10 32912 30080 31421 28887

f11 week11 31482 30310 31570 31302

f12 week12 34254 31026 31561 31410

f13 week13 28261 33154 31830 33116

f14 week14 33275 30703 31473 30203

f15 week15 34104 31967 31654 32046

f16 week16 22147 32687 31899 33281

f17 week17 33257 27960 30923 26601

f18 week18 28685 30093 31157 30594

f19 week19 37614 28749 30910 29449

f20 week20 30195 34064 31580 34348

f21 week21 37554 32119 31442 31856

f22 week22 33901 35358 32053 35275

f23 week23 25090 34256 32238 34451

f24 week24 33023 30226 31523 28834

f25 week25 32801 30819 31673 31347

f26 week26 33781 31325 31786 32220

f27 week27 38901 33335 31985 33156

f28 week28 36043 36145 32677 36603

f29 week29 29030 36448 33013 36267

f30 week30 23933 33108 32615 31925

34

In this given the weekly demand data, what are the exponential smoothing

forecasts for periods 2-10 using α=0.10 and α=0.60?

Assume F1=D1

I have taken forecast for 3 weeks

0

5000

10000

15000

20000

25000

30000

35000

40000

1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031

Chart Title

α=.1 α=.6

0

5000

10000

15000

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40000

1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031

Chart Title

forecast 3 weeks α=.1 α=.6

35

THE MAD STATISTIC TO DETERMINE FORECASTING ERROR

n

F-A

=MAD

n

1=t

tt

MAD 1.25 deviation standard 1

deviation standard 0.8 MAD 1

The ideal MAD is zero which would mean there is no forecasting

error

The larger the MAD, the less the accurate the resulting model

36

37

MAD PROBLEM DATA

Actual Dep Total demand in Pkg

forecast 3 weeks Abs error

week1 31989

…..

week2 28844

…..

week3 31069

…..

week4 31165 30586 -580

week5 32023 30672 -1351

week6 29810 31575 1765

week7 39729 30745 -8984

week8 28681 35212 6531

week9 27059 32221 5162

week10 32912 30080 -2832

week11 31482 30310 -1172

week12 34254 31026 -3228

week13 28261 33154 4893

week14 33275 30703 -2572

week15 34104 31967 -2137

week16 22147 32687 10540

week17 33257 27960 -5297

week18 28685 30093 1408

week19 37614 28749 -8865

week20 30195 34064 3869

week21 37554 32119 -5435

week22 33901 35358 1457

week23 25090 34256 9166

week24 33023 30226 -2797

week25 32801 30819 -1982

week26 33781 31325 -2456

week27 38901 33335 -5566

week28 36043 36145 102

week29 29030 36448 7418

week30 23933 33108 9175

total 116740

MAD 3891

38

SIMPLE LINEAR REGRESSION MODEL

Yt is the regressed forecast value or dependent variable in the model, a is the intercept value of the regression line, and b is similar to the slope of the regression line. However, since it is calculated with the variability of the data in mind, its formulation is not as straight forward as our usual notion of slope.

39

SIMPLE LINEAR REGRESSION FORMULAS FOR CALCULATING “A” AND “B”

22 )xn(-x

)x)(yn(-xy=b

xb-y=a

Actual Dep weeks week*week Sales week*sales

1 week1 1 31989 31989

2 week2 4 28844 57688

3 week3 9 31069 93207

4 week4 16 31165 124660

5 week5 25 32023 160115

6 week6 36 29810 178860

7 week7 49 39729 278103

8 week8 64 28681 229448

9 week9 81 27059 243531

10 week10 100 32912 329120

5.5

385 31328.1 1726721

average

sum average sum

22 )xn(-x

)x)(yn(-xy=b =1721970.557

=xb-y=a -9439509.964

40

THE ROLE OF IT IN FORECASTING

there is a natural role for it in forecasting, given the large amount of data involved, the frequency with which forecasting is performed, and the importance of getting the highest quality results possible. the forecasting module within a supply chain it system, often called the demand planning module

Forecasting modules are available from all the major supply chain software companies, including the ERP firms such as sap and oracle. a number of statistical analysis software firms, such as SAS and SPSS, have programs that can be used for forecasting

0

50000

100000

150000

200000

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300000

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1 2 3 4 5 6 7 8 9 10

Chart Title

sales week*sales(forecast)

41

COLLABORATIVE PLANNING, FORECASTING, AND

REPLENISHMENT (CPFR)

A web-based process used to coordinate the efforts of a supply chain. Demand forecasting

Production and purchasing Inventory replenishment

Integrates all members of a supply chain – manufacturers, distributors, and retailers.

Depends upon the exchange of internal information to provide a more

reliable view of demand.

CPFR STEPS

Creation of a front-end

partnership agreement

Joint business planning

Development of demand forecasts

Sharing forecasts

Inventory replenishment

42

CONCLUSION

43

CONCLUSION AND FUTURE WORK

India’s transportation and logistics sector faces a severe shortage of skilled

manpower, and this is especially critical in the case of integrated logistics

providers. The data of Ambala hub have shown the result, in that 120 truck

daily dispatch use to take place at time of ordinary season and at the time of

festive like Diwali, Holi, new year etc.… season 250 truck dispatch take

place and there are lot of improvement required in term of quality,

technology, method, machine because at the time of festive season the

worker are having more pressure regarding fast delivery and at loading-

unloading, so they do not focuses on handling material carefully they don’t

even read the instruction mentioned on the box due to that they cause damage

to the material and increase customer compliant.

Today we are essentially operating in a global market. In this era of

crumbling economic barriers, the customer reigns supreme. The successful

enterprises in this fiercely competitive economy are those which are able to

ensure a high level of customer satisfaction and at a considerably low cost.

The focus today is not on meeting the customer’s expectations, but on

exceeding them. The strategic role of logistics and supply chain

management in this regard becomes vital.

44

To achieve the objectives of logistic and supply chain management, it is

essential to have a well-defined organizational structure that supports the

corporate mission and improves and influence logistics system performance.

With the growing nature and scope of logistics and supply chain

management in the overall performance of the enterprise over the years,

there have been changes in the logistics organizational structure from being

a part of various functions like manufacturing, finance, and marketing to a

core function.

While designing a logistics organizational structure, firms need to follow

certain principles of organization, like unity of command, span of control,

authority and responsibility, line and staff relationships, centralization and

decentralization of power etc.

45

BIBLIOGRAPHY

• The data has been taken from AMBALA HUB. • www.google.com

• www.safexpress.com

• www.logisticworld.com