Demand Forecasting And Cost Optimization: A Case Study Of Vj Engineering Vietnam

Abstract

In the competitive context of the current manufacturing industry, customer demand is an uncertain factor. Demand forecasting is extremely important and is a key factor for manufacturing companies because it determines the future of the business. This article proposes an optimal forecast demand solution based on mathematical and machine learning methods, thereby delving into the cost optimization strategy for VJ Engineering Vietnam Company, specializing in manufacturing mechanical components. Appropriate forecasting methods have been used to forecast demand, and a Mixed Integer Linear Programming model has been developed to optimize overall costs, including production costs, setup costs, backorder costs, and inventory costs.