Building BTO System in the Sanitary Materials Manufacturer with the Utilization of the High Accuracy Forecasting

In recent years, BTO (Build to Order) system is prevailing. It pursues short lead time, minimum stocks, and thereby minimum cost. But the high accuracy demand forecasting is inevitable for the parts manufacturers. In this paper, well organized BTO system in the sanitary materials manufacturer is seek with the aid of high accuracy demand forecasting, which is newly developed by us. Focusing that the equation of ESM is equivalent to (1,1) order ARMA model equation, a new method of estimation of smoothing constant in ESM was derived. Trend removal method was also devised. AR model is also used for forecasting. After removing trend, AR model is utilized and forecasting is executed. Better one in the forecasting accuracy between them was chosen for the final forecasting. Thus, we could obtain the high accuracy demand forecasting. These methods are examined by the data of sanitary materials manufacturer and the BTO system is newly built by utilizing this method. Further development of this system should be performed hereafter. Keywords—BTO; forecasting; lead time; stock; sanitary materials; AR model