Demand management in an apparel company: a case study

Abstract

Demand forecasting is the function to foresee the amount of goods or services the customers will demand in future. Providing the capability to satisfy current and future demand is a fundamental responsibility of operations management. Get the balance between capacity and demand right and the operation can satisfy its customers cost effectively. Get it wrong and it will fail to satisfy demand and have excessive cost. Having established long-term capacity, operations managers must decide how to adjust capacity of the operations in the medium term. This usually involves an assessment of the demand forecasts over a period of 2-18 months ahead, during which time planned output can be varied. Operations managers can make short-term capacity adjustment, which enable them to flex output for a short period on a predicted basis. Capacity plan can be affected by quality of goods or services. Because for quality defects it may requires capacity adjustments which involve large fluctuations in capacity levels, by hiring temporary staff for example. The new staff and the disruption to the operation’s routine working could increase the probability of errors being made. In order to deliver the products within stipulated time and cost effectively it is necessary to reduce quality defects. This research has been conducted in these contexts. The forecasting method best fit company’s demand is find out and investigated whether the current production process is under control in the company for this product and the process with highest defect rates is also find out and finally make suggestions for improving the quality control. The forecasting method that best fit company’s demand and improved quality control provides a basis for improvement in terms of capacity plan. To make efficient capacity plan and future capacity adjustment, reasonable forecast and improved quality control provides better input. This will enable the company to act more prudent way in future.