Automobile spare-parts forecasting: A comparative study of time series methods

Abstract

In Mexico, the automotive industry is considered to be strategic in the industrial and economic development of the country because it generates production, employment and foreign exchange. Good demand forecasts are needed for better manufacturing management. The time series modelling tools applied to the monthly demand forecasting of automobile spare parts in Mexico are assessed, for the case of a transnational enterprise, considering affordability. The classic methods of moving averages, final value and exponential smoothing, the prestigious autoregressive integrated models of moving averages (ARIMA), the rarely implemented artificial neural networks (ANNs) and the very little explored ARIMA-ANNs hybrid models are compared. A good performance of the models involving ANNs is observed, but they were not as steady as the ARIMA models in the post-sample periods. The mean absolute percentage error (MAPE) was reduced from an original 57% to 32.65%. The obtained results could help demonstrate the importance of improving industrial forecasting methodologies for better planning.