Brief Application Description. Neural Networks Based Forecasting Techniques for Inventory Control Applications

  • Authors:
  • Kanti Bansal;Sanjeev Vadhavkar;Amar Gupta

  • Affiliations:
  • 422 Poplar Street, Wilmette, IL 60091. E-mail: kanti@cs.brandeis.edu;Gupta Consultancy Inc., 14 Pulsifer Street, Newtonville, MA 02160, formerly at MIT. E-mail: vada@mit.edu;MIT Sloan School of Management, Room E53-311, Cambridge, MA 02139. E-mail: agupta@mit.edu

  • Venue:
  • Data Mining and Knowledge Discovery
  • Year:
  • 1998

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Abstract

An increasing number of organizations are involved inthe development of information systems for effective linkageswith their suppliers, customers, and other channel partnersinvolved in transportation, distribution, warehousing andmaintenance activities. We use neural networkbased data mining and knowledge discovery techniques to solvethe problems of inventory in a large medical distributioncompany. The paper describes the use oftraditional statistical techniques to evaluate the best neuralnetwork type. Based on the neural network model describedin this paper, a prototype was conceived with data from a largedecentralized organization. The prototype was successful inreducing the total level of inventory by 50% in theorganization, while maintaining the same level of probabilitythat a particular customer‘s demand will be satisfied.