3m Automobile New Products Diffusion Model And Inventory Optimization

In order to catch the booming demand in Chinese automotive market and maintain stable marketing share, 3M keeps dedicating to new product development. It challenges the supply chain making more accurate forecast and getting the low cost solutions at certain manufacturing capability. The target of this thesis is to find ways with 3M characteristics.Firstly, based on Bass model, the innovation factor and diffusion factor are obtained respectively with the nonlinear least square regression from the historical 55 kinds of automobile products sales data of 3M, which shows the inclination of different product series. Using these factors, the future sales volume can be predicted for new products.Then, using the dynamic programming method, and with Bass model forecast as the input function, the production control points of each time scale is obtained, which can contribute the lowest inventory cost. It includes 3 steps: 1) Get dynamic programming mathematics model base on 3M inventory control metrics; 2) Draw production planning matrix maps; and 3) Work out the optimized result in Excel file. By the analysis of 5 examples, not only the calculation process is validated, but also the detailed inventory control method of different cost structure is mapped out.By the research of these two facets, this thesis figures out the academic model and calculating method which can be used for inventory control process of automobile products in 3M company.