Supply Chain Management for Vector Valves Ltd

This project aims to analyze and implement supply chain management for Vector Valves Ltd, focusing on forecasting and demand management, master scheduling, and inventory management.

Supply Chain

Contents
1. Introduction.............................................................................................................................................3
Forecasting and demand management.........................................................................................................3
Understanding Customer relationship and Expectation and Values.....................................................3
Demand forecasting.............................................................................................................................4
Forecasting..................................................................................................................................................7
Demand management..............................................................................................................................7
Forecasting methods...............................................................................................................................7
Short range demand on forecasting........................................................................................................8
Weighted Average methods.................................................................................................................8
Linear regression.................................................................................................................................9
Exponential smoothing......................................................................................................................10
Forecast accuracy..............................................................................................................................12
Master scheduling......................................................................................................................................13
Master production schedule and production plan...................................................................................13
Master scheduling decision....................................................................................................................13
MRP and delivery promise....................................................................................................................14
Inventory control.......................................................................................................................................15
Nature of the inventory control..............................................................................................................15
Need of inventory control......................................................................................................................15
Inventory control techniques.................................................................................................................17
Fixed order quality................................................................................................................................17
Economic order quality.........................................................................................................................18
Making steps of ABC analysis...............................................................................................................18
Control based on ABC classification.....................................................................................................20
Conclusion.................................................................................................................................................21
References.................................................................................................................................................21

List ofFigures
Figure 1-Dependent and independent demand................................................................................6
Figure 2-Analyzing the order product normal distribution..............................................................7
Figure 3-Planning the order stock system.......................................................................................8
Figure 4-Planning Assemble ordering process................................................................................8
Figure 5-master production planning.............................................................................................15
Figure 6-Initial stage of material required planning......................................................................16
Figure 7-Customer account of the material of supply chain demand............................................17
Figure 8- Inventory control of the planning process.....................................................................18
Figure 9-Buffer inventory supply chain demand operation...........................................................19
Figure 10-Inventory control of the supply chain demand of normal distribution.........................20
Figure 11-Ordering process of inventory control demand............................................................21

1. Introduction
The aim of this project is to implement and analyze the victory valves Ltd Company
using supply chain management system. Division of vector valves which specifies Murry
Engineering Firm. The manufacture of the valves company cans which specifies in the USA and
the UK Company for the markets in Europe. The vector valves company that can assign different
kind of department for the propose of improving the business of the inventory management for
the main role and responsibility on managing Directors, REG FOX sales manager, Peter nuttall
Finance Director, Engineering Directors, manufacturing manager of the company.
This research’s main objective is to understand and analyze the vector valves supply
chain management process which can use the three methods that includes, the forecasting and
demand management, master scheduling, inventory management of the system. And finally for
analyzing the Vector's major approach to master planning and inventory control and recommend
improvement so it shall be investigated.
Forecasting and demand management
The forecasting of the market place where there exists suppliers who supply the raw
material, parts of the assemblers, and they also assemble the completed product followed by
shipping the products in a large quantity to its distributors. The distributors helps in distributing
the completed products to its retailers. The retailers sell the received products to their customers.
Thus, it is the consumers who are the end users/ final consumers. There even exists some
competitors for competing the similar marketplace with same products or substitute products.
The demand management contains the understanding of basic market and the target of
customer’s expectations, then the value’s definition and demand forecasting and demand
planning’s fundamental overview (CARTER, 2011).
Understanding Customer relationship and Expectation and Values
Forecasting of the customer’s exception values, which are used for the critical importance
for the outbound bycustomer logistics system. Value the increasing requirements of effective
demand management of supply chain system (HITT, 2011).The customer who is aware of the
types of forecasts which are required to understand the collaboration amount trading partners can
support the complete process of forecasting and demand management (Reimann&Ketchen,

2017). Find the primary steps for order fulfillment process, and understand how the effective
order management could create value for the firm along with its customers. Additionally, the
customer service meaning must be realizedby understanding its significance forthe logistics and
supply chain management system ("Special Topic Forum onResources and Supply Chain
Management", 2013).
Demand forecasting
Demand forecasting has been used to enable the vector valves companyto take several
business decisions like production process planning, ordering raw material, managing the funds
and price deciding for every single product to deliver the customer (Svensson, 2010). The
demand forecasting of the vector sales of the standardary valves in 500 types of products. The
customer can order the product for delivery within the demand value of two weeks after placing
the order. Consider the sales by type of valves ranging from £500K and most popular to about
£10K; it is lower volume type of the forecasting demand ("Special Topic Forumon Power in
Supply Chain Management", 2015).
Finding the forecast demand on the new valve sales on 1995, it will analyze 70 percent which is
used for designing and 30percent is used for made to order (Tachizawa& Wong, 2015).
Nature of Demand and Supply chain system
Analyzing the demand supply chain’s demand which contains the following two types,
 Dependent demand
 Independent demand
Independent demand has been used for the normal distribution of the final product pattern
demands.Dependent demand has been used for the Demand pattern of the highly variable type
components and materials of the product (Priem&Swink, 2012).

Figure 1-Dependent and independent demand (slack, Jones and Johnston, 2019).
Agnate
Normal distribution is,

Figure 2-Analyzing the order product normal distribution (slack, Jones and Johnston,
2019).
The dependent and Independent Demands of the Demand Supply Chain specify the
average and the Standard Deviation ("Supply Chain Model on Uncertainty Demand", 2015). The
dependent demand of the forecast is used for production schedule at the same also used to
identify the item demands of the product for the supply chain system. To specify the product
range of the supply chain has been used for the manufacturing lead of the standard deviation
which specifies the three week of the smaller range of products. Assemble to order type product
which is 12 weeks for the larger standard deviation on customized product. The “Make to order”
of the custom product of the raw material is 2500 components and the Product order is 1250 of
the supply chain, which is a very large demand. The engineer who has to order the product on the
large range is 750 unique products on the supply chain system (Yan, 2014).

Figure 3-Planning the order stock system(slack, Jones and Johnston, 2019).
Figure 4-Planning Assemble ordering process(slack, Jones and Johnston, 2013).
Forecasting
The process of forecasting cans which is used for thedata of historical sales are utilized
for developing the estimate of the desired forecast, to meet the demands of the customer.
Demand Forecasting gives the estimation of goods and services which the customers will buy in
the near future (Rojas, 2018).

Demand management
The term ‘Demand Management’ refers to the management of both sales forecast and
customer orders processes, which can involveand also includes:
 Sales forecasting
 Physical distribution
 Order promising
 Sales order entry
 Customer service
Management action of the demand forecasting is,
 Increase production
 Decrease production
 Ease off on selling/promotional effort
 Increase selling/promotional effort
Forecasting methods
There contains 4 primary forecasting methods which the financial analysts utilize for
predicting the future revenues, capital costs and expensesof a business. However, there are
various quantitative budget forecasting tools which are utilized frequently. In this article,only the
top 4 methods will be discussed namely- straight-line, simple linear regression, moving average,
and multiple linear regressions (Hong, Xie& Black, 2019).
Short range demand on forecasting
Simple moving average method:
Moving averages refer to a smoothing technique which looks at the fundamental patterns of a set
of data for establishing the future value’s estimate. The fundamental types include, three months
and six months moving average types (Kann, Schellander-Gorgas & Wittmann, 2014).

Weighted Average methods
The “Weighted Average Method” is used for plotting the graph on January 1995 and 3
month of the average weighted methods on demand (Belvedere & Goodwin, 2017).
period 1995 demand
moving
average
1 Jan 3021.43
2 Feb 1510.71
3 Mar 1007.14 1846.00
4 Apr 755.36 1091.00
5 May 604.29 789.00
6 Jun 503.57 621.00
7 Jul 431.63 513.00
8 Aug 377.68 438.00
9 Sep 335.71 382.00
10 Oct 302.14 339.00
11 Nov 274.68 304.00
12 Dec 251.79 276.00

Linear regression
“Linear Regression Element” and add both the horizontal axis and vertical axis titles.
Rename the vertical axis as, “Revenue” and the horizontal axis as, “Number of radio ads.”
Change the chart title as, “Relationship between ads and revenue.”March 2015 and the upward
trend from June 1995 of the 6 previous periods as the basis for each month’s forecast of the value
is 251.79 and 276.00 (Huang, 2013).
Exponential smoothing
The exponential smoothing cost which is specified the sales for the next period of the
forecast on of the actual sales demand. The plot the demand graph and consider the alpha lines of
the graph is 0 and 1 the constant alpha value is 0.3 and find the demand forecast value.
Previous demand value+ alpha constant value*new demand value-previous demand value
week Actual demand demand forcast
1 3021.43 782.80
2 1510.71 1454.39
3 1007.41 1187.95

4 755.36 1187.95
5 604.29 1249.26
6 503.57 1249.26
7 431.63 1423.09
8 377.68 1423.09
9 355.71 1762.57
10 302.14 1762.57
11 271.68 2479.39
12 251.99 942.04
Using exponential smoothing technique, produce the forecasts where the smoothing constant is
0.3
week Actual demand demand forcast Column1
1 3021.43 782.80
2 1510.71 1454.39
3 1007.41 1187.95
4 755.36 1187.95
5 604.29 1249.26
6 503.57 1249.26
7 431.63 1423.09
8 377.68 1423.09
9 355.71 1762.57
10 302.14 1762.57
11 271.68 2479.39
12 251.99 942.04
9393.6 16904.36 2197.57
0.3
Comparing the two different forecasts to the high demand in 13 % of November to commercial
to January 1995 high value is 16904.36 on the demand management forecast to increase
production (Raghuvanshi, 2016).
year high demand
1995 2197.57

A seasonal index denotes how the periodic amount typically a month, compares with the
average of all the periods in the extended period like from 1994 to1995. The seasonal indexes
could be utilized for analyzing any activity which is influenced due the season or a particular
time of the year 1995.
year seasonal indicies period demand mean absoluate
1995 jan 1 3021 3021
1995 feb 2 1510 756
1995 mar 3 1007 505
1995 apr 4 755 379.5
1995 may 5 604 304.5
1995 jun 6 503 254.5
1995 jul 7 431 219
1995 aug 8 377 192.5
1995 sep 9 355 182
1995 oct 10 302 302
1995 nov 11 271 271
1995 dec 12 251 251
9387
Forecast accuracy
Set the forecast for calculating the 1995 product (Guo& Han, 2011). Accuracy in whole
year of the mean value is,
Mean absolute derivation =∑
j
m
Forecastj−actualsalej ∨
m

Master scheduling
The master scheduling which can used for the important of the aggregate planning which
is used for several agnate planning scheduling (Fullerton & Molina, 2010).
Master production schedule and production plan
The master schedule of the production plan is developing the business activities for
month wise or quarter wise production requirement of the product group families that can find
the estimate on the demand. The main process of the aggregation plan which is used for
developing the production plan and which is denoted by the roles and responsible of
manufacturing department, marketing and financial department of the supply chain demand on
the vector valves company (BERTORELLE, BENAZZO & MONA, 2010).

Figure 5-master production planning (slack, Jones and Johnston, 2019).
Master scheduling decision
The decision of the Aggregate plan is beneficial due to it concentration on the basic
course of actions, objectives without delaying the details, and consistent strategic goals of the
company.
MRP and delivery promise
Distribution resource planning (DRP) is a method used in business administration for
planning orders within a supply chain. DRP enables the user to set certain inventory control
parameters (like a safety stock) and calculate the time-phased inventory requirements.The safe
stock of the company is assembled the table of the product and the find the supply chain demand
must be safe stock stored in warehouse. The calculating the safe stock which is calculating on the
direct material 67% , work overhead 12%, and commercial 13% of the material Requirement
Planning.” It refers to a dependent system, which calculates materials requirements and
production plans to satisfy known and to forecast sales orders.MRP makes volume and timing
calculations based on an idea of what will be required for supply demand in the future
(Subramani, 2015).

Column1
safe stock
Demand
direct material
Std
Unit Cost
Ordering Cost
Holding Rate
week in year
CSL
Lead time
weeks in year
Num of
Periods
EOQ
mu DL
sigma DL
Safety factor k
total unit cost

Figure 6-Initial stage of material required planning(slack, Jones and Johnston, 2019).
The MRP planning is denoted as checking the product available or not of the production can be
used for planning of the production of material schedule the MRP planning is used for the
finding the reorder level, minimum level, maximum level and average stock level of the supply
chain demand. vector values of the standard product catalogue value is 500 types that are
denoted as 10 different size and 3 different material that are denoted as outlines mountings and
automatic controls. The customer can which order the product which can deliver the pricing
order of 2 weeks. The standard valves range is 500k and lower range is 10 k and for 1995 which
is 70 percent if the designing standard, and 30 percent of the order of the product will increasing
the 10 to 15 percent of the year. The manufacturing of the product to delivery on the standard
values lead time of smaller types which is denoted as 3 weeks and large type is denoted as 12
weeks. The lead time is depends on the ought the product material on the customer and delivery
product to customer with good safe stock. (Sun, 2015).

Figure 7-Customer account of the material of supply chain demand(slack, Jones and
Johnston, 2019).
Inventory control
The inventory control of the vector valves company that can specify the two types of the
inventory management (Miller, 2014).
 Nature of the inventory control
 Need of the inventory control
 Inventory control techniques
Nature of the inventory control
The nature of the inventory control has been maintained the time lags and moving goods
to the customer could sales at risk of the acceptance cost. The inventory has maintained the
buffers to meet uncertainties in demand, supply movements of goods. the nature of the inventory
is following the four stages that are include the
 Raw material,
 Work in progress,
 Finished goods
 Goods for resale.
The raw material inventory is denoted as customer to order the product that can
scheduled for the market products. Working in progress has been used for the transformation of
the finishing goods to ready for sale to customer. The customer to buys the goods form inventory

the value of the inventory account is reducing by the cost of goods sold. For commodity product
items that one cannot track individually, accountants must choose a method that fits the nature of
the sale on supply chain demand.The nature of the inventory order is analyzing in the two ways
i.e., when to order more? How much to order?.When to order more has been denoted as the
ordering of the exceed stock of the increasing storage and the risk obsolescence (Su, Yan & Tsai,
2012). The customer can order the product is very late and vector valves company profit is lost
of order and reducing the yearly wise income of the supply chain demand.The customer to order
the product is lately and finding distribution of the production process lead time is short at the
same time to decreasing the loss of order profit of the inventory system on the supply chain
demand.(Axsäter, 2011).
Need of inventory control
Inventory (or stock) is the term used to describe materials stored in a transformation
system (Gerchak, 2018). All operations require inventory and in supply chain and demand the
timing ofinventory must be managed effectively (Huiskonen, 2012).The approach to operations
management is called ‘zero inventory’.
Figure 8- Inventory control of the planning process (slack, Jones and Johnston, 2019).

Planning and Service of the raw material on all product inventories has been stored on the buffer
operation inventory on supply demand (Chen, Lu & Xu, 2012). The buffers that follow the
different stages that includes, cycle inventory, anticipating inventory, pipeline inventory at the
same time to specify the manufacturing of the raw material, at each stage of the progress work,
and finally analyzing that the inventory has been in good condition ("Inventory Control Effect on
Profitability of a Business Organization", 2017).
Figure 9-Buffer inventory supply chain demand operation (slack, Jones and Johnston,
2019).
Inventory control techniques
The inventory control techniques followthree stages,
 Fixed order quantity
 Fixed order cycle
 Lead time
Fixed order quality
Manufacturing Company purchases 500K of a product every year at a unit cost of 750. The order
cost is is £30 per order, and the holding cost per unit per year is £10k, Lead time is 6

Figure 10-Inventory control of the supply chain demand of normal distribution (slack,
Jones and Johnston, 2019).
The demand value is determined as, not steady. Then, it finds the normal distribution of
the safe stock. To find the safe stack of the target availability, to find the average stock and
average value of the demand (Aygunes, 2013).
Average stock= 453.5+(3021/2)=1964
average stock
particular components component B
maximum level 792 57
minimum level 36 22
414 39.5 453.5
Average value=226
Economic order quality
“Economic Order Quality” is the attempt to balance the cost of ordering a product as well as the
cost of holding it in inventory. Based on the assumption that optimizing of the inventory for each
item, shall produce the overall optimization for all products of the supply demand. The inventory
management of the economic order quality is the order quantity that minimizes the total holding

cost 1250 and ordering costs is 750. It is one of oldest classical production scheduling models.
(Chen, 2017).
Economic Order Quantity
Demand D 10000
ordering cost
c_
t 30
unit cost
c_
t 750
Holding rate h 1250.00
lead time 2
EOQ 21.91
Total revalent cost 753118.52
Qopt =
√ 2 c0 D
CC
c0is placing order
CC ist h e h oldingorder
D is annual usage of product
EOQ=21.91

Figure 11-Ordering process of inventory control demand(Sameh saad, 2013).
Making steps of ABC analysis
The ABC analyzing model has been identified the total value of the product and find the
increasing profit of the each year. The taken the value of list of items, annual demand, and unit
cost using and find the value of percentage of the ABC analysis classification is A increases.

Control based on ABC classification
Results of the Pareto analysis are used to classify items as follows:
Class A items

Top 14% or so, represent about 30% of total value
Class B items
Next 25% or so, represent about 10% of total value
Class C items
Remaining 8% or so.
B-
010 C-
011 D-
012 E-
013 F-
014 G-
015 H-
016 J-
017 A-
018 A-
019 B-
020 A-
021 B-
022 C-
023 A-
024 B-
025 C-
026 A-
027 B-
028 C-
029 D-
030 A-
031 B-
032 C-
033 D-
034 E-
035 F-
036 A-
037 A-
038
0%
5%
10%
15%
20%
25%
30%
ABC ANALYSIS
A B C
Conclusion
The aim of this project is to implement and analyze the vector valves Ltd Company by using the
Supply Chain Management system. Analyzing the vector valves supply chain followsthree
stages. Forecasting and Demand management is used for the company to find the dependent and
independent demand, analyzing the forecast methodsshort range demand, moving average, linear
regression, Exponential smoothing, seasonal index forecast accuracy and finally the mean value
of the variable is found as 2197.57. The moving average forecast finds the demand and average
cost of the supply chain value as 6599. Finding the exponential smoothing of the forecastis used
to know how many productsare availableforo sale on the next time period,which is used for
alpha, actual demand and demand cost of the forecast demand value i.e., 16904.36.The master
schedule is used for productionof the supply chainplan which is week wise, month wise, and year
wisescwhallis completed. The inventory supply control has been used for finding the EOQ, safe
stock, and for analyzing the ABC model and classification after which itwill be completed. The
EOQ planning is used for finding the holding cost and ordering cost of the inventory control on
safe stock value is 21.19. The inventory control of ABC analysing and classification is A, which
is increasing the product every year is completed.

Recommendation
The recommendation of the vector valves supply chain to analyze the current and past
budgets, expenses, sales and product deficiencies in order to provide recommendation for
business growth and problem resolution. The each process of the supply chain to identifying the
current status of the company and improve the new business opportunities and profit of the
company. Providing the weekly and monthly reports and presentation in engineer, procurement
and construction fields,Good company skills that have the ability to prioritize responsibilities,
meet client time line and downstream downloads of requests in peak timesHelping colleagues
and best team player skills to ensure smooth performance of the industry Following, support
agent marketing providing the invoice for the client and used for the sales and sale force
department and looking for the develop marketing in new areas of the supply chain demand will
be completed.

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