Open Access

Forecasting demand is challenging. Various products exhibit different demand patterns. While demand may be constant and regular for one product, it may be sporadic for another, as well as when demand occurs, it may fluctuate significantly. Forecasting errors are costly and result in obsolete inventory or unsatisfied demand. Methods from statistics, machine learning, and deep learning have been used to predict such demand patterns. Nevertheless, it is not clear for what demand pattern, which algorithm would achieve the best forecast. Therefore, even today a large number of models are used to forecast on a test period. The model with the best result on the test period is used for the actual forecast. This approach is computationally and time intensive and, in most cases, uneconomical. In our paper we show the possibility to use a machine learning classification algorithm, which predicts the best possible model based on the characteristics of a time series. The approach was developed and evaluated on a dataset from a B2B-technical-retailer. The machine learning classification algorithm achieves a mean ROC-AUC of 89%, which emphasizes the skill of the model.

Forecasting intermittent and lumpy demand is challenging. Demand occurs only sporadically and, when it does, it can vary considerably. Forecast errors are costly, resulting in obsolescent stock or unmet demand. Methods from statistics, machine learning and deep learning have been used to predict such demand patterns. Traditional accuracy metrics are often employed to evaluate the forecasts, however these come with major drawbacks such as not taking horizontal and vertical shifts over the forecasting horizon into account, or indeed stock-keeping or opportunity costs. This results in a disadvantageous selection of methods in the context of intermittent and lumpy demand forecasts. In our study, we compare methods from statistics, machine learning and deep learning by applying a novel metric called Stock-keeping-oriented Prediction Error Costs (SPEC), which overcomes the drawbacks associated with traditional metrics. Taking the SPEC metric into account, the Croston algorithm achieves the best result, just ahead of a Long Short-Term Memory Neural Network.

Demand forecasting intermittent time series is a challenging business problem. Companies have difficulties in forecasting this particular form of demand pattern. On the one hand, it is characterized by many non-demand periods and therefore classical statistical forecasting algorithms, such as ARIMA, only work to a limited extent. On the other hand, companies often cannot meet the requirements for good forecasting models, such as providing sufficient training data. The recent major advances of artificial intelligence in applications are largely based on transfer learning. In this paper, we investigate whether this method, originating from computer vision, can improve the forecasting quality of intermittent demand time series using deep learning models. Our empirical results show that, in total, transfer learning can reduce the mean square error by 65 percent. We also show that especially short (65 percent reduction) and medium long (91 percent reduction) time series benefit from this approach.

Thorough maintenance of industrial equipment is crucial for the finances of companies. Whereas the purchase of new tools can be an expensive business, reconditioning special gear often costs just a fraction. In this paper, preliminary steps for an accurate visual based preventive maintenance of hobbing wheels are investigated. To perform robust and reliable decisions about the wheel's condition, tool department specialists require precise taken captures of it. For this reason, a visual control cell is built, which depends on correctly aligned hobbing wheels in its image acquisition construction. The tool needs to be placed on a turn-table and rotated, so that a single tooth is centered in the field-of-view of the camera mounted on a robot arm. For this alignment task, three different main approaches with various preprocessing steps are investigated, a brute-force algorithm, an orb-feature approach and an image regression model. The results show that even a brute-force algorithm can be outperformed by a moderate deep neural network.

This paper proposes a novel framework - "Transparent Reasoning in Artificial intelligence Cause Explanation" (TRACE) - that combines root cause analysis, explainable artificial intelligence, and machine learning in a comprehensible manner for the shopfloor worker. The goal is to enhance transparency, interpretability, and explainability in AI-driven decision-making processes as well as to increase the acceptance of AI within an industrial manufacturing area. A human AI collaboration tool in perspective. The paper outlines the need of such a framework, describes the proposed design science approach for the development.