RESULT – Multivariate Demand Forecasting Helps Anticipate Turning Points in Lifecycle Demand
PREDICTING TURNING POINTS IN LIFECYCLE DEMAND
Capital Equipment Maintenance
$ Multi Billion
Capital equipment maintenance services business with presence in
DIVERSE PRODUCT LIFECYCLES
Client had a sophisticated planning system which relied exclusively on historical demand data and univariate time series modeling to generate forecasts.
System was late in catching declines in demand that resulted in overstocking & eventual expensive inventory write-offs.
TOOLS & METHODS
An installed base growth and decay model was created based on product shipments and known product life-span
A multivariate time-series model was built to anticipate turning points in parts demand based on a decay in installed base providing the intelligence to prevent expensive inventory and write-offs.
You may also be interested in