SAB’s procurement team needs to determine expected consumed price variance (CPV) values instead of purchased price variance (PPV) values in order to assess potential benefits of certain business improvement projects. In this report the problem is analysed and explained and a suggested solution is developed using Monte Carlo simulation.
The project will aim to provide SAB with a model that uses all available information to forecast CPV for (SLM) and (HFM) for an end-of-financial-year forecasting horizon if current operational trends are sustained. This will include an estimation of future logistics plans as current distribution plans are only developed for a 3 month planning horizon. The model must also be able to forecast CPV based on different strategies in order to test the potential benefit of these strategies. The model will be able to integrate with current information systems and IT resources that are used in Procurement.
Thesis (B Eng. (Industrial and Systems Engineering))--University of Pretoria, 2011.