A computerized causal forecasting system using genetic algorithms in supply chain management

Forecasting activities are widely performed in the various areas of supply chains for predicting important supply chain management (SCM) measurements such as demand volume in order management, product quality in manufacturing processes, capacity usage in production management, traffic costs in transportation management, and so on. This paper presents a computerized system for implementing the forecasting activities required in SCM. For building a generic forecasting model applicable to SCM, a linear causal forecasting model is proposed and its coefficients are efficiently determined using the proposed genetic algorithms (GA), canonical GA and guided GA (GGA). Compared to canonical GA, GGA adopts a fitness function with penalty operators and uses population diversity index (PDI) to overcome premature convergence of the algorithm. The results obtained from two case studies show that the proposed GGA provides the best forecasting accuracy and greatly outperforms the regression analysis and canonical GA methods. A computerized system was developed to implement the forecasting functions and is successfully running in real glass manufacturing lines. (C) 2002 Elsevier Science Inc. All rights reserved.