Short-Term Time Series Prediction for a Logistics Outsourcing Company

Short-Term Time Series Prediction for a Logistics Outsourcing Company

Angeliki Papana (Postdoctoral Researcher, Greece)
DOI: 10.4018/978-1-4666-2008-7.ch009
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In this chapter, tools from univariate time series analysis and forecasting are presented and applied. Time series components, such as trend and seasonality are introduced and discussed, while time series methods are analyzed based on the type of the time series components. In the literature, linear methods are the most commonly used. However, real time series data often include nonlinear components, so linear time series forecasting may not be the optimal choice. Therefore, also a basic nonlinear forecasting method is presented. The necessity of these methods to logistics service providers and 3PL companies is presented by case studies that present how the operational and management costs can be cut down in order to ensure a service level. Short term forecasts are useful in all the units of activation of 3PL companies, i.e. supplies, production, distribution, storage, transportation, and service of customers.
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Logistics is becoming an important part of every economy and every business entity. The globalization has led many companies outsourcing their logistic functions to 3PL companies, which face many challenges, e.g. find the optimal number of warehouses and distribution centres, the location of these warehouses, the optimal routings of the products, the scheduling of transportation to pick up the products from the manufacturers and deliver the products to the customers, and monitoring the inventory levels. Forecasting is an essential tool that helps 3PL companies overcome all these challenges. Of course, many forecasting methods have been developed and can be applied to different types of data, for different types of forecasting time horizons, have different estimation complexity and demand in computer efficiency and of course different reliability and precision of forecast. Time series methods are used mainly for short-term forecasts, and concern all units of activation of 3PL companies, e.g. the prediction of supply demands, control of reserves and requirements in personnel, materials, instruments, etc.

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