Network Planning - Network design - Data aggregation
3 important questions on Network Planning - Network design - Data aggregation
Which procedure is usually carried out when aggregating data?
- Cells or clusters of customers are created, called customer zones.
- Items are aggregated into a reasonable number of product groups based on:
a) Distribution pattern
b) Product type
Is aggregated data more effective than using the original data?
Reduction in variability achieved through aggregation, forecast demand is significantly more accurate at the aggregated level. For example, various research report that aggregating customers into about 150 to 200 zones usually results in no more than 1 percent error in the estimation of total transportation costs.
Which approach is usually used for aggregating data?
- Aggregate demand points into at least 200 zones. If customers are classified into classes according to their service levels or frequency of delivery, each class will have at least 200 aggregated points.
- Make sure each zone has approximately an equal amount of total demand. This implies that the zone may be of different geographic sizes.
- Place the aggregated points at the center of the zone.
- Aggregate the products into 20 to 50 product groups.
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