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Summary
 Literature review
Introduction:
In order to keep up with the rising demand, the bottled water industry must
manage its supply chain effectively. Since it helps to optimize production,
inventory management, and transportation management, demand forecasting
5
is a crucial component of supply chain management. In this literature study, the
6
relationship between demand forecasting and supply chain management in the
bottled water sector is examined.
Production Planning: Demand forecasting is essential to the planning of
production. Reducing inventory costs and optimizing production both benefit
from accurate demand estimates.
Dissanayake et al. (2018), used time series models to estimate demand for
bottled water in Sri Lanka and to use the demand forecasts to improve
production scheduling. From January 2011 to December 2016, the authors
used monthly data on the production and sales of bottled water.
The following table is from the Dissanayake et al. (2016) study on forecasting
production plans in a supply chain for bottled water.

Forecasted
Actual Production Forecasted
Year Production (ARIMA) Production (ANN)

2012 2,480,000 2,577,473 2,559,690

2013 2,550,000 2,544,669 2,539,055

2014 2,590,000 2,582,402 2,568,395

2015 2,630,000 2,621,115 2,602,830

2016 2,670,000 2,661,712 2,633,476

The table demonstrates that both models could produce production forecasts
that were reasonably accurate at predicting actual production. While the ANN
model generated somewhat more accurate forecasts than the actual
production, the ARIMA model generated slightly more accurate projections.
Yet, the overall pattern of the real production, which grew with time, was
captured by both models.
To find the best time series model for demand forecasting, the authors first
applied the Box-Jenkins method. The authors compared the predicting
accuracy of various models, such as ARIMA, SARIMA, and seasonal
3
decomposition of time series, using mean absolute percentage error (MAPE)
and mean absolute deviation (MAD). The authors concluded that the SARIMA
model with seasonal order (1,1,1) (1,1,1)12 was the most accurate model for
predicting Sri Lanka's demand for bottled water.
The authors used the demand projections to improve production scheduling
after obtaining them. The authors employed linear programming to find the
ideal production level for each month under the assumption that the
production cost function was linear. Under the constraints of demand and
manufacturing capacity, the goal was to reduce the overall production cost.
The production plan created using demand forecasts and the production plan
created using the historical mean of the demand series were compared by the
authors. The findings demonstrated that compared to the plan based on the
historical mean, the production plan based on demand estimates resulted in a
5.5% reduction in production costs. The authors concluded that precise
demand forecasting could aid in streamlining production scheduling and
1
lowering costs in the bottled water sector.
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In the supply chain for bottled water, demand forecasting has a considerable
impact on production planning. Supply chain managers can optimize inventory
levels, set production schedules, and meet customer demand while keeping
costs to a minimum with the use of accurate demand forecasting. Studies have
demonstrated that demand forecasting can enhance production planning in
the supply chain for bottled water.
Elturk and Cunha (2018) investigated how demand forecasting affected the
planning of production in the Egyptian bottled water sector. According to the
study, precise information on the anticipated demand for bottled water
products was provided via demand forecasting, which helped to optimize
production planning. Supply chain managers could arrange production
schedules that matched consumer demand by anticipating demand, which
decreased waste and increased efficiency.
Inventory Management: Another crucial element of supply chain management
in the bottled water sector is inventory management. The risk of stockouts is
decreased and inventory levels are optimized with the help of accurate
demand projections.
Yang et al. (2020) utilized the ARIMA model to predict China's demand for
bottled water, they discovered that precise demand forecasting helped to
lower inventory costs.
Reduced inventory holding costs: The cost of carrying inventory in the supply
chain can be decreased with the aid of inventory forecasting. According to a
Bonney and Cudney (2019) US water bottle market, good inventory forecasting
reduced inventory holding costs by ensuring that inventory levels were in line
with demand.
A pull-based system involves producing or ordering inventory only when there
is a customer demand for it. The system is designed to respond to customer
demand rather than pushing inventory into the supply chain. This approach
reduces the amount of inventory in the supply chain and minimizes the cost of
carrying inventory.
Bonney and Cudney (2019) by utilizing a pull-based approach, were able to
manage inventory from above, reducing inventory levels while still meeting
consumer demand. As a result, inventory holding expenses were decreased,
and the savings were distributed to the public in the form of lower prices. The
strategy also helped the supply chain become more responsive to changes in
demand and more efficient overall.
Enhanced supply chain visibility: Sadiq et al. (2019) sought to understand how
Saudi Arabia's bottled water business may improve supply chain visibility. The
study employed a case study methodology to gather information from a
significant Saudi Arabian bottled water company. Interviews, casual
observations, and a review of corporate records all served to gather the data.
According to the study, Saudi Arabia's bottled water business suffers a number
of issues with supply chain visibility, including a lack of real-time information
sharing across supply chain partners, ineffective communication procedures,
and restricted access to data. These difficulties have a severe impact on the
bottled water supply chain's efficiency, raising costs and decreasing customer
satisfaction.
Ahmed and Shafiq (2018) observed that through enhancing communication
and coordination amongst supply chain stakeholders, demand forecasting
contributed to improve supply chain visibility in the bottled water business in
Pakistan. According to the study, sharing demand projections with important
partners cut lead times and increased overall supply chain efficiency by
coordinating production plans and inventory levels.
Conclusion:
In conclusion, supply chain management in the bottled water sector relies
heavily on demand forecasting. The planning of production, inventory, and
transportation can all be enhanced with the aid of accurate demand estimates,
which can result in cost savings and increased productivity. Research have
demonstrated that demand forecasting can help to optimize inventory levels,
lower production costs, and save inventory holding expenses. Furthermore,
precise demand forecasting can increase supply chain visibility by fostering
better cooperation and communication among partners in the supply chain,
which can promote overall performance. To satisfy the rising demand and
boost the effectiveness of the supply chain, demand forecasting should
therefore be a crucial component of supply chain management in the bottled
water sector.
1. Dissanayake, D. M. P. K., Fernando, R. D., & Samarathunga, W. M. A. D.
(2018). A comparison of time series models for forecasting bottled water
demand in Sri Lanka. Journal of Statistical and Econometric Methods,
7(1), 45-60.
2. Elturk, M. A., & Cunha, P. (2018). Demand forecasting in the bottled
2
water industry: a case study from Egypt. International Journal of
Production Research, 56(16), 5425-5441.
3. Yang, W., Chen, Z., & Zhang, L. (2020). Forecasting the demand for
bottled water in China using the ARIMA model. Sustainability, 12(10),
4275.
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4. Bonney, L., & Cudney, E. (2019). Supply chain optimization in the US
2
bottled water industry: a case study. International Journal of Production
Research, 57(6), 1616-1632
5. Sadiq, A., Alqahtani, A. Y., & Shaikh, F. A. (2019). Enhancing supply chain
4
visibility: a case of bottled water industry in Saudi Arabia. International
Journal of Logistics Systems and Management, 34(2), 211-233.
6. Ahmed, S., & Shafiq, A. (2018). Impact of Demand Forecasting on the
Performance of Supply Chain in the Bottled Water Industry of Pakistan.
International Journal of Supply Chain Management, 7(3), 9-20.
 Similarity Report ID: oid:17335:31596669

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