Simulation of Cement Manufacturing Process and Demand Forecasting of Cement Industry

Demand forecasts form the basis of all supply chain planning. The supply chain decisions made before demand has materialized are made to a forecast. Forecasting may involve taking historical data and projecting them into the future with some mathematical model. Good forecasts are of critical importance in all aspects of business. A company’s forecasting techniques affect the overall supply chain management. Different quantitative methods can be used to forecast future demand. Simulation process allows a company to run different experiment on process that will achieve the desired goal. This research is focused on the simulation of cement manufacturing process to find out the production loss of machines that will affect the production quantity, and analyzing different methods of forecasting to compare their errors so that appropriate forecasting method is identified to predict correct demand. Depending on the forecasting, the simulation process applied can aid to estimate amount of raw materials require producing particular amount of cement to fulfill the demand including the losses in various steps of manufacturing process. Moreover seasonality of demand is considered where the same demand will repeat at a particular period. The longer horizon forecasts, using Holt-Winters method, are usually less precise than the shorter horizon forecast; that is, long horizon forecasts have larger standard deviations. Customer demand of cement consumption is calculated from quantitative survey. A random sampling method is implemented to find out overall distribution of demand of cement production in Bangladesh. This investigation on overall demand could facilitate the comparison between the futures forecasted demand and the overall customer demand. The cement industry can adapt the demand pattern to produce desired amount of cement that optimize production costs