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Mitigate Lost Sales Using Forecasting Demand in Rahina Indonesia

Taufiqurrahman S, Liane Okdinawati

Abstract


Abstract. Forecasting demand is a crucial tool for every business to achieve efficiency in planning the operation management plans especially in fashion industry. The fashion trend which rapidly changing every period is one of the factors that influenced the demand of the product to be uncertain. In order to maximize the profit, every company should avoid the lost sales by having good forecasting demand system. Rahina Indonesia as a Small Medium Enterprise in Bandung has no proper forecasting method that suit with the actual demand. The company currently using qualitative forecasting method which using the CEO of Rahina Indonesia’s judgement. High amount of lost sales became the biggest problem for the company and it occurred the most especially to voal hijab type which considered as the biggest contributor for company’s sales. The company losing the potential profit for every number of items that lost sales. Analysis using 6 months past demand was used to determine the forecasting method. It turns out the most suitable forecasting demand for Black, Navy, and Maroon voal hijab is time decomposition multiplicative method which the method has the lowest MAPE, MAD, and MSD. The new forecasting method reduce the amount of lost sales. On black hijab voal, it reduces the lost sales from 389 to 78, on navy it reduces from 229 to 41, and on maroon it reduces from 225 to 13. By applying this forecasting demand method, the company will reduce their lost sales which can maximize their profit and obtain more revenue. The accurate forecasting also gives the company more preparation for the inventory to face the uncertain demand in the future.

Keywords: Forecasting Demand; Fashion; Planning; Time Series Decomposition; Lost Sales.

 


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