Int J Syst Assur Eng Manag (December 2022) 13(Suppl.
3):S978–S986
https://doi.org/10.1007/s13198-021-01157-0
ORIGINAL ARTICLE
CNN model optimization and intelligent balance model
for material demand forecast
Zheng Tang1 • Yuemeng Ge1
Received: 29 March 2021 / Revised: 7 May 2021 / Accepted: 23 May 2021 / Published online: 3 July 2021
Ó The Society for Reliability Engineering, Quality and Operations Management (SREQOM), India and The Division of Operation and
Maintenance, Lulea University of Technology, Sweden 2021
Abstract The purposes are to improve the accuracy of
inventory demand forecast, balance the indexes of enter-
prises, and reduce the costs of human, material and finan-
cial resources of enterprises and suppliers, thus reducing
the supply chain costs and meeting the actual needs of
enterprises. In terms of training a large amount of data,
deep learning is better than traditional machine learning.
The sales demand time series data and the previous mate-
rial demand time series data are input and trained by back
propagation (BP) neural network, and then the material
demand value is output. Therefore, the historical data of
sales demand forecast and material information are input,
and the model is established by BP neural network, which
not only takes into account the decisive factor of sales
demand forecast, but also considers the material con-
sumption, achieving more accurate forecast. The material
demand budget of enterprises is analyzed and a material
forecast demand model based on deep learning algorithm is
proposed. The model uses a neural network to input the
sales demand forecast data, material inventory information
and material attribute information into the model, and then
the model is trained by the training set in accordance with
the error back propagation algorithm. Finally, the training
effect of the model is tested by the test set. The results
show that when the independent variables include sales
demand forecast, material consumption forecast and
material attribute information, the forecast error of both
models is lower and the effect is better, compared with the
& Yuemeng Ge
guanggao181@nbt.edu.cn
1 of manufacturing enterprises. At present, most enterprises’
Business School, Zhejiang Fashion Institute of Technology,
Ningbo 310058, China
123
material consumption data only as an independent variable.
The forecast method based on neural network proposed
increases the lead time of the forecast, give the supplier a
longer time to prepare goods, and reduce the shortage or
surplus of supply caused by the short lead time. Therefore,
the material demand forecast model based on convolution
neural network (CNN) algorithm provides an important
reference for the enterprises, helps them improve their
work efficiency and promotes the development of enter-
prises. This model achieves a great improvement on the
accuracy of material demand forecast, and has a certain
guiding significance in relevant theory and practice.
Keywords Deep learning  Material demand forecast 
Intelligent balance  Convolution neural network
1 Introduction
In the process of production, the demand plan of raw
materials often deviates from the actual consumption, and
the plan needs to be adjusted manually (Pechmann and
Zarte 2017). Employees of the enterprise need to com-
municate with suppliers to temporarily increase or reduce
the number of parts purchase, which increases the pur-
chasing cost of the manufacturing enterprise. If the forecast
of material demand is more accurate, it can reduce the
purchasing cost of manufacturing enterprises and the pro-
duction cost of suppliers (Bakhtavar et al. 2021), thereby
reducing the cost of the whole supply chain. The material
demand forecast has a profound impact on the supply
chain, and it is an important prerequisite for the production
material demand forecast is based on ERP (Enterprise
Int J Syst Assur Eng Manag (December 2022) 13(Suppl. 3):S978–S986
Resource Planning) system, which requires a large number
of calculations to obtain data within the enterprise. This
wastes a lot of time, and shortens the forecast lead time,
thus making the response time for manufacturing enter-
prises and their suppliers shortened (Gavidia 2017).
Finally, the supply of materials cannot meet the production
plan of the manufacturing enterprises, and the enterprises
have to change their production volume.
Machine learning and intelligent algorithm are widely
used in material prediction. Shen et al. (2019) combined
BP neural network with the genetic algorithm to forecast
the material demand of maintenance enterprises, which
provides decision support for material procurement and
inventory. The forecast model has the advantages of
genetic algorithm searchability and neural network stability
(Shen et al. 2019). Scholar Sun et al. (2019) optimized the
existing models and built a dynamic forecast model to
achieve a more accurate forecast model of enterprise
logistics demand. The research of material demand forecast
using machine learning focuses on the selection of model
variables, the construction of the model, and the opti-
mization of the model (Sun et al. 2019). However, the
above research does not discuss the references of system-
atic model variables selection. Besides, due to the difficulty
of data collection, some studies use simulation technology
to verify the model, which cannot fully reflect the whole
process of forecast (Graser et al. 2018). With the progress
of data collection technology and the optimization of
storage hardware, many enterprises can provide data sup-
port for machine learning, and the research should be based
on real enterprise data. When a large number of data are
trained, deep learning performs better than traditional
machine learning (Wang et al. 2017).
Therefore, to address the above problems, the quanti-
tative analysis method is adopted. The neural network is
used to have the quantitative analysis of the real data of the
enterprise, and deep learning is applied to the research of
the material demand forecast of the manufacturing enter-
prise. Furthermore, the auxiliary forecast method for the
material demand forecast of the ERP system of the man-
ufacturing enterprise is discussed. Taking the historical
data of sales demand forecast and material information as
input, the model is established by BP neural network,
which focuses not only on the decisive factor of sales
demand forecast but also the material consumption in
history to achieve a more accurate forecast. The innovation
of this study is to increase the lead time, reduce the part
claims paid by enterprises to suppliers due to the change of
production plan, and reduce the purchasing cost of enter-
prises. Also, the auxiliary method simplifies the forecasting
process and saves human resources.
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2 CNN based on material demand forecast
Forecast refers to the use of the past and present known
information, through experience or scientific methods, to
forecast the possible future situations, and then to evaluate
the development trend of things. In demand-driven manu-
facturing enterprises, any process in sales, production, and
purchase plans is driven by forecast. Forecast determines
how to make production plans, procurement plans and
other production activities. But it is very difficult to make a
forecast that conforms to the actual situation completely,
and sometimes there will be a long distance between the
forecast and the reality. Although there will be errors in
forecasts, their guiding significance cannot be ignored.
2.1 Material demand forecast
The abbreviations involved in this article are shown in
Table 1.
The personalization of customer demand makes it more
and more difficult to forecast the sales demand of manu-
facturing enterprises according to orders, as shown in
Fig. 1. The demand-driven theory is produced for a long
time and widely accepted by manufacturing enterprises.
The theory holds that the formation, existence and recon-
struction of the supply chain are based on certain market
demand, and in the operation process of the supply chain,
the user’s demand is the driving source of information
flow, service flow and capital flow of the supply chain.
Under the mode of supply chain management, the opera-
tion of the supply chain is driven by orders. Commodity
purchase orders are generated under the driving of user
demand orders. Then, commodity purchase orders drive
product manufacturing orders, and product manufacturing
orders promote raw material purchase orders accordingly,
which shows that demand forecast is becoming more and
more important. How to reduce the forecast error is the key
to establishing the model because the demand drives the
arrangement of all activities in the supply chain. The more
accurate the forecast of material demand is, the lower the
Table 1 Abbreviations
BP Back propagation
CNN Convolution neural network
ERP Enterprise resource planning
MRP Material requirement planning
RNN Recurrent neural network
CNN-LSTM Convolution neural network-long short-term memory
API Application programming interface
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Material
Requirements
Planning
Master
Production
production
plan Plan
Logistics list
Inventory Shopping list
Inventory
Fig. 1 Material demand forecast process
purchasing cost of manufacturing enterprises and the pro-
duction cost of suppliers are (Allwood et al. 2017).
The existing information is used to predict the material
demand, and various methods are used to make scientific
and reasonable inferences on the demand and the trend in a
certain period through the analysis and research on various
factors affecting demand change. The demand forecast in
manufacturing enterprises provides the foundation for the
establishment of material demand plans in manufacturing
enterprises, and can guide the production and logistics
activities of upstream and downstream enterprises in the
supply chain (Fu and Chien 2019). Material demand fore-
cast refers to the analysis and research on the types and
quantity of materials required for production and operation
in the near future according to the existing sales data or
material consumption data. Material demand forecast can
provide auxiliary support for the formulation of production
and inventory strategies of enterprises. The main functions
of material demand forecast are: reducing inventory,
improving the accuracy of supply, cutting purchasing cost,
and improving the efficiency and competitiveness of the
whole supply chain (Kucukvar et al. 2018).
The order point method is used to forecast the material
demand, and an order point and a safety value for the
inventory quantity of materials are set. When a certain
material or product used in the production or for sale is less
than the order point, the order or purchase order is sent out
to supplement the inventory. When the inventory quantity
is reduced to the safety stock, the purchased materials just
reach the warehouse (Bedi and Toshniwal 2018). The time
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when inventory is reduced from the order point to the
safety point is the lead time for the order. The lead time
mainly includes: ordering time of ordering party, time of
supplier preparation, time for making transportation and
consignment plan, loading and unloading time, trans-
portation time of goods, and warehousing time. The
inventory quantity at the order point is equal to the lead
time multiplied by the daily consumption. When produc-
tion fluctuates, the consumption speed of materials will be
unbalanced, and the time from inventory materials to the
order point will be different from the expected (Huber et al.
2017). Therefore, when the actual inventory reaches the
order point, the order can be issued to avoid the phe-
nomenon of overstocking or insufficient inventory due to
the consumption change. If the lead time of the order of the
material is L, the average daily consumption is C and the
safety stock is S, the calculation equation of order point
(the inventory quantity at the order point) R is:
R ¼ CL þ S ð1Þ
Suppose that when the consumption speed is normal, the
order quantity is C, the supply cycle is T, the order lead
time is T, the order point inventory is R, the daily con-
sumption is C and the inventory quantity is Q. Then the
equation is as follows:
Q RS
C¼ ¼ ð2Þ
T L
When the consumption speed increases, the order
quantity remains unchanged and the supply cycle shortens.
It needs to move the order point to a fixed point to the left
again, that is, the order time L needs to be corrected. The
correction quantity is as follows:
DL ¼ L  L0 ð3Þ
Besides, the order point inventory R should also be
corrected. The inventory of the new order point C is:
R0 ¼ R þ DR ð4Þ
In this case, the daily consumption rate is:
Q RS
C0 ¼ ¼ ð5Þ
T0 L0
From the above equation, the correction of order time is
as follows:
RS RS
DL ¼ L  L0 ¼  ð6Þ
C C0
Int J Syst Assur Eng Manag (December 2022) 13(Suppl. 3):S978–S986
The revised quantity of the order is:
C ufacturing resource planning II (MRP) in 1980s (Behera
DR ¼ C 0 DL ¼ C0 Lð1  Þ ¼ LðC 0  CÞ ð7Þ
C0
Regular and non-quantitative purchase is a means of
purchase without changing the order cycle and quantity. In
this mode, the order point is fixed and is affected by the
speed of material consumption. When the consumption
speed changes, the actual inventory of the inventory curve
reaching the order date is different from the order point
inventory (Al-Musaylh et al. 2018). The order quantity is
adjusted as follows:
DQ ¼ R  Q ð8Þ
2.2 Intelligent balance mode
Before making enterprises generate production plans,
enterprises need to balance the production plan and the
indexes of the enterprise, including sales demand, business
objectives, resources and logistics, energy and logistics,
management system, production capacity, quality assur-
ance, personnel and efficiency, technology and products,
and factory planning, etc. (Poggi et al. 2017), as shown in
Fig. 2. After these assessments, more accurate production
plans can be generated, but the time for suppliers to prepare
parts is often limited (Deepika and Bhat 2021). If the
enterprise wants to purchase sufficient parts in a short time,
it will have to increase the cost. Moreover, if the produc-
tion volume is less than the demand forecast, it will cause
an inventory backlog and increase the cost of inventory.
Therefore, to make the forecast more accurate, the forecast
period should be lengthened to reduce the supply chain cost
(Campos et al. 2020).
ERP is put forward by industrial science and technology
research enterprises in the early 1990s based on the
development of information technology and supply chain
management. It infers the development trend of manufac-
turing management information system. ERP is not a
completely new system and it is the gradual evolution of
Fig. 2 Production planning and control
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material requirement planning (MRP) in 1970s and man-
et al. 2014). The explanation of the term ERP by the
American Association of production and inventory man-
agement is that the differences between an ERP system and
a typical MRP II system is the technical requirements, such
as the requirements for graphical user interface, relational
database, integration with customers and suppliers, and
making various reports as needed. In short, ERP is ‘‘a large
modular and integrated process-oriented system, which
integrates the information flow of internal financial
accounting, manufacturing, purchase, sales, and inventory,
provides decision-making information quickly, and
improves the operation performance and quick response
ability of enterprises.‘‘
2.3 Convolutional neural network
Convolution neural network (CNN) is a kind of feed-for-
ward neural network, and its artificial neuron can respond
to a part of the coverage of the surrounding units. It has
excellent performance for large-scale image processing.
CNN is composed of one or more convolution layers, a
fully connected layer at the top, correlation weight and
pooling layer. Because the data set contains some series
data, the effect of using one-dimensional CNN is compa-
rable to recurrent neural network (RNN). For simple tasks
such as text classification and time series forecast, a small
one-dimensional CNN can replace RNN, and the speed is
faster (Yamashita et al. 2018). CNN consists of three parts:
a convolution layer, a pooling layer and a fully connected
layer. The convolution layer is mainly responsible for
extracting local features of the input layer by using a filter.
The pooling layer is mainly used to greatly reduce the
dimension of the input layer. And the full connection layer
is similar to the input layer, hidden layer and output layer
of the basic neural network, and it is used to output the final
result (Yao et al. 2020). The specific structure is shown in
Fig. 3.
CNN is a kind of feedforward neural network with
convolution calculation and deep structure, and it is one of
the representative algorithms of deep learning (Wang et al.
2020a, b). It has the ability of representation learning, and
can classify input information according to its hierarchical
structure. Therefore, it is also called ‘‘translation invariant
artificial neural network’’ (Zhao and Peng 2021). It is
excellent in handling the problems about computer vision,
because it can carry out convolution operation, extract
features from local input block, modularize representation
and make efficient use of data (Gangrade and Bharti 2020).
These properties make CNN perform well in computer
vision, and sequence processing effective. Usually, the
convolution layer is two-dimensional convolution, which
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Fig. 3 Structure of CNN
extracts two-dimensional blocks from the image tensor and
applies the same transformation to each block. In the same
way, one-dimensional convolution can be used to extract
local one-dimensional sequence segments (i.e. sub-se-
quences) from the sequence. Time can be seen as a spatial
dimension, like the height or width of a 2D image. In a
CNN, a convolution layer can have multiple convolutional
cores, while each convolution core slides on the input data
and processes only a small part of the image at a time. In
this way, the convolution layer of input can extract the
most basic features in the data, and then combine them into
higher-order features. Suppose the dimension of input layer
is 32 * 32 * 3, the dimension of filter is defined as 5 * 5
according to the dimension of data, and the step size is set
to 1, the number of filters is set to 6. After convolution
calculation, the dimension of independent variable is con-
verted to 28 * 28 * 6. Then, the pooling layer is defined, the
pooling value is taken the maximum, the dimension of the
filter is 2 * 2, and the step size is set to 2. After convolution
calculation, an independent variable with dimension of 14
* 14 * 6 is obtained. At this time, the network calculation
of the first layer of CNN ends.
In the second layer network structure, after the inde-
pendent variables of 14 * 14 * 6 in the upper layer is
obtained, the filter with dimension of 5 * 5 is defined, the
step size is set to 1, and the number of filters is 16. After
convolution calculation, an independent variable with
dimension of 10 * 10 * 16 is obtained. Then a pooling layer
is defined. The pooling value is taken the maximum. The
dimension of the filter is 2 * 2. At the same time, the step
size is set to 2 and the number of filters is set to 16. After
convolution calculation, an independent variable with
dimension of 5 * 5 * 16 is obtained. At this time, the
calculation of the second layer of CNN ends. After the
calculation of the second layer, the fully connected layer
appears. In the fully connected layer, the 5 * 5 * 16
independent variables are decomposed into 400 * 1 inde-
pendent variables, and two hidden layers are defined. After
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Int J Syst Assur Eng Manag (December 2022) 13(Suppl. 3):S978–S986
that, the normalized exponential function output layer is
defined to output the final result.
2.4 Construction of material demand model
CNN-LSTM (Convolution Neural Network - Long Short-
Term Memory) model is a combination model of CNN and
Long Short-Term Memory. Before LSTM Long Short-
Term Memory) is introduced, RNN is the mainstream deep
learning sequence model. But it has two obvious technical
defects: one is the disappearance of gradient, and the other
is the gradient explosion (Priyadarsini et al. 2021; Suresha
and Parthasarathy 2021). LSTM can solve the problem of
gradient disappearance. In the actual parameter update, the
value of bias can be controlled to be close to 1; In this case,
the gradient will not disappear even if many times of
multiplication are conducted, and the existence of ‘‘long
distance’’ multiplication term can still be retained. That is
to say, a reasonable gradient direction can be found to
update the parameters without gradient explosion, and it
can perform long-distance information propagation of
hidden layers. Here, the LSTM structure can avoid the
problem of gradient vanishing.
In addition, LSTM can solve the problem of long-term
dependence. Traditional RNN node output is only deter-
mined by weight, offset and activation function (Wang
et al. 2020a, b). The reason why LSTM can solve the long-
term dependence problem of RNN is that LSTM introduces
gate mechanism to control the flow and loss of features.
RNN doesn’t have the function because the influence of the
long-distance hidden layer in RNN is either very strong or
very weak. Therefore, it is difficult to find an appropriate
gradient to optimize the long-distance information.
The basic working mechanism of long and short-term
memory network is a time cycle neural network, which is
specially designed to solve the long-term dependence of
general RNN. All RNNs have a chain form of repetitive
neural network module. In a standard RNN, this repetitive
structure module has only one very simple structure.
Int J Syst Assur Eng Manag (December 2022) 13(Suppl. 3):S978–S986
Based on material resource balance, production capacity
balance and sales demand, the final material demand plan
can be obtained after the production plan of the current
month is determined. Since the balance of material
resources affects the monthly production plan, the enter-
prise’s profit will be reduced if the materials cannot meet
the production capacity or sales demand (Pohludka et al.
2018). Therefore, CNN is used to forecast material
demand. The forecasting principle and the lead time can be
adjusted according to the needs of the enterprise. In this
way, the material resources can fully meet the demand of
production capacity and sales, increasing the profit of the
enterprise. Compared with the original cost system of the
enterprise, the forecast procedure is simpler. The improved
material forecast process can directly predict the material
demand after the sales demand is generated, and the sup-
plier can be informed as soon as the forecast result appears.
In terms of the original system of the enterprise, the flow
chart of auxiliary material demand forecast is shown in
Fig. 4.
2.5 Model parameters and training
CNN model and CNN-LSTM model are tested respec-
tively, and the programming language used is Python. The
deep learning database Keras based on Python is used for
the test. Keras is an advanced neural network API written
in Python. It can run with TensorFlow, CNYK, or Theano
as the back end. CNN defines a filter with a dimension of 5
* 5, sets the step size to 1, with the number of 16 filters.
After convolution calculation, an independent variable with
a dimension of 10 * 10 * 16 is obtained. Subsequently, a
pooling layer is defined, and the pooling value is set to the
Fig. 4 Improved process of material demand forecast
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maximum. The dimension of the filter is 2 * 2, and the step
size is set to 2.
3 CNN optimization model and intelligent balance
effect analysis
3.1 Optimization of CNN parameter model effect
One-dimensional convolution is used, for the independent
variables of the neural network are one-dimensional inde-
pendent variables, as shown in Fig. 5. When the indepen-
dent variables in the input layer only contain the inventory
of the transit warehouse, the following results are obtained
on the test set based on CNN: RMSE = 2263.87.
When the parameters are changed, RMSE = 2063.45 is
obtained on the test set. Through comparative analysis, it is
found that after a layer of the hidden layer is added to the
original parameters and the nodes of the hidden layer are
increased to 100, the complexity of the model is improved
and the fitting ability of the model is strengthened. When
the input layer contains three kinds of independent vari-
ables, such as sales demand forecast, transfer warehouse
inventory and material attribute, the obtained RMSE =
2241.76 is better than the previous results. And RMSE =
2063.45 is obtained after setting the parameters in the
training set under CNN.
When the parameters are changed and reset, the result is
as follows: RMSE = 1990.28 on the test set, as shown in
Fig. 7.
Based on comparative analysis, a layer of the hidden
layer is added to the original parameters, and the nodes of
the hidden layer are increased to 100, thus the complexity
of the model is increased and the fitting ability of the model
Fig. 5 Initial value test results
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Fig. 6 Test results after adding independent variables
Fig. 7 Test results after the hidden layer added
is improved. The result RMSE = 1990.28 is better than the
previous results.
3.2 CNN-LSTM effect analysis
When the independent variables of the input layer only
include the inventory of the transit warehouse, the
parameters are reset under CNN-LSTM model, as shown in
Fig. 8.
When the parameters are changed and reset, and
RMSE = 2137.39 is obtained on the test set. The results are
shown in Fig. 9.
Through comparative analysis, the number of iterations
to adjust parameters increases significantly after the batch
is increased to 256, resulting in model overfitting and
generalization ability reduction. When the input layer
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Fig. 8 Test results of inventory only in transit warehouse
Fig. 9 Test results after batch added
contains three independent variables: sales demand fore-
cast, transit warehouse inventory, and material attribute,
RMSE = 1835.01 is achieved on the test set after the
parameters are changed based on CNN-LSTM. After the
number of filters is reduced from 64 to 32, the complexity
of the model is simplified, the degree of overfitting is
reduced, and the generalization ability of the model is
improved.
Through the comparative analysis, it is found that under
the same CNN structure, the CNN model with three inde-
pendent variables of sales demand forecast, transit ware-
house inventory and material attributes has better forecast
results than the CNN model with only transit warehouse
inventory. Under the same CNN-LSTM structure, the
CNN-LSTM model with three independent variables of
sales demand forecast, transit warehouse inventory, and
material attributes has better forecast results than the CNN-
Int J Syst Assur Eng Manag (December 2022) 13(Suppl. 3):S978–S986
LSTM model with only transit warehouse inventory. After
different neural network models are compared, it is con-
cluded that the forecast results of CNN-LSTM model are
better than those of CNN model when the three indepen-
dent variables of sales demand prediction, transit ware-
house inventory and material attributes are included.
4 Conclusions
CNN and LSTM are combined. When the sales demand
forecast is taken as the independent variables, the forecast
results are more optimized, which shows that the forecast
model with the sales demand forecast is better. When the
independent variables are the same, the prediction error of
CNN-LSTM model is lower than that of CNN model.
Although many small and medium-sized enterprises do not
have a complete ERP system, they also need to make
accurate material demand forecasts as much as possible.
And the research content provides a more optimized fore-
cast method for these enterprises. CNN-LSTM model is
applied to forecast material demand, combined with three
types of independent variables. The model is characterized
by easy data collection and check, and makes up for the
lack of a complete ERP system. The auxiliary material
demand forecast method solves the problem of short
forecast lead time and gives the supplier longer time to
prepare goods, reducing the supply shortage or supply
surplus caused by the short lead time. Thus, the manufac-
turing enterprise can operate smoothly according to its
production plan. Moreover, the increase of forecast lead
time can reduce the parts claims paid by enterprises to
suppliers due to the change of production plan, lowering
the purchase cost of enterprises. In the upcoming related
research, more detailed sales demand forecast value will be
included in the independent variables to make the material
information of the supplier more accurate.
Acknowledgments The authors acknowledge the help from the
university teachers.
Author Contributions All authors listed have made a substantial,
direct and intellectual contribution to the work, and approved it for
publication.
Funding This research received no external funding.
Compliance with Ethical Standards
Conflict of Interest All authors declare that they have no conflict of
interest.
Ethical approval This article does not contain any studies with
human participants or animals performed by any of the authors.
S985
Informed consent Informed consent was obtained from all individ-
ual participants included in the study.
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