Case-Based Reasoning: A Methodology to Build Hybrid Models in Forecasts for Stochastic Environments

Case-Based Reasoning: A Methodology to Build Hybrid Models in Forecasts for Stochastic Environments

Carlos Hernán Hernán Fajardo-Toro (Universidad EAN, Colombia), Andrés Lopez Astudillo (Universidad Icesi, Colombia), Paloma María Teresa Martínez Sánchez (Universidad El Bosque, Colombia), Paola Andrea Sánchez Sánchez (Universidad Simón Bolivar, Colombia) and Alvaro José Fajardo-Toro (Universidad Icesi, Colombia)
DOI: 10.4018/978-1-7998-0202-0.ch015

Abstract

Companies must deal with a high uncertainty caused by the characteristics of the markets and the economic, political, and social environment in which they offer their products and services. These characteristics are defined by the preferences of the consumers, which have a high variety coupled with the digital era. On the other hand, there is the necessity to implement measures that align the companies with the sustainability concepts, because of both legislations as well as the image that the customer could have of them. Due to this context, the organizations must find a way to optimize process and structures that require high flexibility given the need of combining perfect innovation, customization, standardization, and sustainability. Part of this planning process is the construction of forecast models that allows predicting with high precisión. In this chapter, a theoretical exposition is done and a literature revision of machine learning techniques is applied to try to solve the forecasting problem with special emphasis in neural networks and Case-Based Reasoning - CBR.
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Introduction

The main aim of the supply chain management – SCM – is to allow the organization to develop competencies to have the possibility to anticipate to the needs of the markets and the consumers. The above trough the understanding the processes aimed at integration with logistic activities, integration of logistics processes that allows to optimize transporting, storage, planning and purchasing, planning and projection of acquisition of working capital assets among others.

The SCM at organizations is designed through the transversal processes of the businesses; these processes are integrated with customers and suppliers through the activities they configure, information flows, the flow of money and especially, those processes that allows the construction of value in the market where the organizations participates (Boiko, Shendryk, & Boiko, 2019; Ngai, Lai, & Cheng, 2008).

However, nowadays the characteristics of markets makes the companies have to look for strategies to be competitive offering added value to the customers and being profitable. These characteristics includes environmental restrictions and social needs around the subject, the mass customization and product lifecycles each time shorter, among others.

In regard the mass customization, by definition is the capability to offer a high volume of different product options, i.e. the custom option of a product to many different clients, this in a large market that demands this customization and without substantial increments in cost, time delivery, and decrease of quality. The value of this customization is to give satisfaction to individual customer preference at a low cost in mass production, making that the companies to improve their supplier policies, orders allocation, and information systems integration. (Zhang, Guo, Huo, Zhao, & Huang, 2019, Xu, Landon, Segonds, & Zhang, 2017, Hu et al., 2018).

On the other hand, about the environmental subject, which obliges the companies to develop a Sustainable Supply Chain Management – SSCM-. The environmental aspects are defined by different legislation, customer pressures for eco-friendly products, and the need to compete in a global market, especially with the challenge that represents the global warming and the aspects that derivate from this problem (Büyüközkan & Çifçi, 2012). The global warming, which is a problem that determines the current policies at a global scale, and where International climate change negotiations led by the United Nations Framework Convention on Climate Change (UNFCCC). This framework describes the adaptation to climate change including several programs that countries should realize to reduce the effect with the less impact or improve on the life quality of the population. These Programs should have integrated social and economic actions in order to minimize the adverse effects to the economy, offer a good public health program for the population and the improvement the environment quality (UNFCCC, 2012).

In this context, the SCCM look for CO2 emissions reduction as well as the optimal use of water resources. To achieve optimal reductions, it is important to determine the carbon and water footprints, which are measures of the gas emissions produce by a process or a supply chain, as well as the use of fresh water by the companies. The main aim of the organizations associated with this, is to design processes that have lower footprints possible, without affecting the quality and value offer (Acquaye et al., 2017; Noya et al., 2016, Acquaye et al., 2017; Kagawa et al., 2015; Lozano & Huisingh, 2011; Noya et al., 2016).

The implementation of SSCM implies the processes redesign according with the aspects mentioned above as well as the application of concepts defined by the eco-design, which is the product design having taking in to count all the stages of its Supply Chain and life cycle.(Cluzel, Yannou, Millet, & Leroy, 2016; Kuo, Smith, Smith, & Huang, 2016; Mathioulakis, Babalis, Kalogirou, & Belessiotis, 2017; Moreira, De Santa-Eulalia, Aït-Kadi, Wood-Harper, & Wang, 2015; Theodosiou, Stylos, & Koroneos, 2015).

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