Adaptive Procurement Planning in Global Sourcing: A Rolling Horizon Forecasting Approach

In the practice of global sourcing, the problem of long-term procurement planning is difficult because of the large demand uncertainty. This paper presents an adaptive optimal planning approach using a rolling horizon scheme. The approach combines the techniques of time-series forecasting and stochastic lot-sizing. An efficient heuristic solution is introduced. The proposed approach is evaluated by ex-post-facto experiments. Promising results are shown when the approach is applied on a long-term procurement planning problem with large unstructured demand uncertainty.