Production organization and demand forecasting in the companies: The case of textile firms in Zonguldak

Production is very important to conduct their activities for the companies. Several concepts such as globalization, advanced technology, definition of quality, environmental protection, information society and changes in management methods have brought new meaning to production. Evaluation of the production process in the best way causes to increase the market value and profitability of the companies. Companies have generally applied inventory management for the purpose of using in the future of their inventory and efficient sale management. For instance; wholesalers, retailers, companies, production companies and blood banks have stock of their products and hence they have to decide an inventory strategy. Although inventory management generally may not be suitable in small-scale firms, they can make decisions by using manger inventory. On the other hand, advanced inventory management methods are used in the big companies and hence they can save very large proportions of their money. The aim of this study is to examine total sales of Dinarsu that is a yarn production factory by using econometric methods and we also try to forecast the total demand for the period of September 2013 - January 2014. We consider the exponential smoothing methods and Box-Jenkins (ARIMA) method in the concept of econometric models. It is determined that Holt Double Exponential Smoothing method gives the best estimates for the total demand according to the mean absolute error and the square root mean square error performance criterions. We also employ ARMA model to estimate total sales. Empirical results suggest that ARMA model has superior performance to forecast total sales amount. These findings can be useful for the production planning management. Keywords: Production, Planning, Inventory