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Forecasting for a manufacturer that produces based on tenders

August 2, 2013 • Featured, How to, Modeling

What should be the forecasting model of a manufacturer that makes to order based on tenders? It wants to improve service time/availability by keeping some items in safety stock. The risk is that there is 50/50 chance that a tender may not be won.

To minimize risk, the best thing is to stock some raw material or manufacture limited amount of products without complete configuration. Here I assume you would be able to use the raw material somewhere else if the tender did not come through, and products that are partly configured can be re-configured easily for other customers.

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