FORECASTNIG WITH GMDH PREDICTOR, A CASE

STUDY OF CEMENT INDUSTRY

Demand Planning &

Forecasting
Demand Planning & Forecasting is very difficult,
especially if it's about the future.

Syed Misbah Uddin & Eng. Aminur Rahman

International Conference
ShahJalal onofMechanical,
University Science and Industrial
Technology
& Energy Engineering (ICMIEE 2018)
Outline of the presentation
 Objective of the paper
 What Is Demand Forecasting?
 What Is GMDH Predictor?
 Position of GMDH Predicting Technology All Over the World
 GMDH Mathematical Model
 History Of GMDH Predicting Technology
 GMDH Predicting Neural Network Algorithm
 GMDH Predicting Neural Network System
 Aggregate Forecast Plan Vs. Capacity By GMDH Predictor
 Mean Absolute Percentage Of Error Comparison Different Method With GMDH
Predictor
 GMDH Algorithm Development Procedure
 Customize GMDH Algorithm Development Procedure
 Objectives of the presentation

 Find out the best forecasting technique for cement Demand.

 Find out the best neural network technique for cement
Demand.
 Comparing forecasting other technique with GMDH predictor.
 To ensure maximum utilization of all resources.
 To minimize the production throughput time.
 To maintain optimum level inventory.
 To maintain flexibility in manufacturing operations.
 More accurate Aggregate plan for capacity utilization issue all
for long range of time.
 Demand forecasting :
Predicted
demand
looking
Past
Demand

Forecasting is a technique
used for predicting future
demand based on past demand
information

Predicted demand
Actual demand (past sales)
 GMDH Predictor
• GMDH Predictor is a neural network base predicting technology. GMDH
predictor deal with any forecasting task with minimum efforts. GMDH
predictor make parallel inventory with customer’s demand which can
avoid shortages or excess stock, reduce inventory carrying cost & increase
operating cash flow.
• Position of GMDH Predicting Technology All Over the World

Market legend companies

 History Of GMDH Predictor
• Period 1968-1971, The technology was originated in 1968 by Soviet scientist
Prof. Ivakhenenko. The stimulation forecasting model was more accurate
predictor. As reference functions polynomials, logical nets, fuzzy sets were
used.
• Period 1972-1975 The problem of modeling of noised data and incomplete
information basis was solved.

• Period 1976-1979 Multilayered GMDH algorithms was investigated that have

showed less error by neural network control systems.
• Period 1980-1988 It was proved, that non-physical models of GMDH are more
accurate for approximation and forecast than physical models of regression
analysis.

• Since 1989 to Present stage of GMDH development can be described as twice-

multilayered and parallel combinatorial algorithms for multiprocessor computers.
GMDH Predictor Neural Network Algorithm
GMDH Algorithm Neural Network combination Multiple methods. GMDH Algorithm Neural
Network Precision is usually more apparent than other model & method because neural network sort
out the best algorithm partial algorithm for individual item. GMDH Algorithm Neural Network get
close and have contingency plans. It is multilayered procedure.

Therefore, the algorithm with such an approach usually referred as GMDH-type Neural Network or
Polynomial Neural Network.

Example: Neural Network

1.We Have Forecasted Demand 100 Pcs & also have On hand stock 50 Pcs. So the network system
take the decision = 50 Pcs

2.We Have Forecasted Demand 100 Pcs & also have On hand stock 50 Pcs. The item production
minimum lot is 150. So the network system take the decision =150 Pcs
GMDH Predicting Neural Network System

Neural Networks.mp4
 GMDH Algorithm Development Procedure

• Gather the historical data of what you want to

forecast.
• Divide data into initiation set and evaluation set.
• Use the first set to develop the models.
• Use the second set to evaluate.
• Compare the MAD and MAPE of each model & then
finally (3-8) model use to develop Predicting Neural
Network.
• GMDH (Neural Network) Method is always best
because it’s combination of multi Method.
Customize GMDH Algorithm Development Procedure

• Gather the historical data of a company that you want

to forecast.
• Divide data into initiation set and evaluation set.
• Use the first set to develop the models.
• Use the second set to evaluate.
• Compare the MAD and MAPE of each model & also
considering the company custom demand, then
finally (3-8) model use to develop Predicting Neural
Network for the company.
• GMDH (Neural Network) Method is always best
because it’s combination of multi Method.
Aggregate Forecast Plan Vs. Capacity By GMDH Predictor
Master Forecast Plan Vs. Capacity Status Check By
GMDH Predictor
MAPE of Comparison Different Method With GMDH Predictor

Method MAPE
3 month Moving Average 11%
6 month Moving Average 14%
12 month Moving Average 11%
Weightage Moving
10%
Average
Regression 12%
GMDH Method 4%
Exponential α=0.3 11%
Exponential α= 0.5 9%
Double Exponential α=
13%
0.3, β= 0.5
 Thanks To All Attendee

Syed Misbah Uddin & Eng.

Aminur Rahman

ShahJalal University of Science and Technology

International Conference on Mechanical, Industrial

& Energy Engineering (ICMIEE 2018)