# Market-Oriented Procurement Planning Leading to a Higher Service Level and Cost Optimization
## 4 Results and Discussion
### Simulation Results  
The simulation results for the three models within two out of the five scenarios are presented in the following tables:  
As can be seen in Table 9, the demand was assumed the same in all three models. The MAD was more than two times lower for the market-oriented (MO) model due to the selection of the forecasting technique based on the set of methods presented in Section 3. Based on this selection, the MO model can minimize the uncertainty of procurement planning. In addition, inventories were lower for the EOQ model due to its lack of safety stocks in the model. In this scenario, there was only a small effect on the OTD and Service Level due to the fact that the average demand of this scenario was low and because the stationary demand trend was the most common over the lifecycle. As a result, for the service level and OTD performance of the models, all three models presented values of 100%, with a small decrease for the EOQ model due to a week with backlogged delivery. An area of difference in the models was the average procurement quantity, as, while the EOQ and the MO models presented values near 2000 units, the Reorder-Point (RP) model had almost 4000 products as average. Regarding the cost analysis, the MO model had the best performance with 10% less than the RP Model and 6% less than the EOQ Model. The MO model opened a new warehouse in week 21, while the other two models opened a new warehouse around week 120. To summarize, for this scenario and lifecycle-demand curve, the MO model presented the best performance for the service level as it equaled the others or was better and had lower inventory costs with higher capacity utilization of employees as it adapted all areas of inventory management to customer demand. Figure 6: Generated demand scenarios based on lifecycle demand patterns (own elaboration). As can be seen in Table 10, the demand was assumed the same in all three models. The MAD was almost eight times lower for the market-oriented (MO) model due to the selection of the best-fit and accurate forecasting technique and also due to the fact that the other two models performed demand forecasting with the cumulative moving average method, and this was not suitable as the forecast error was high. In addition, inventories were lower for the EOQ model due to its lack of safety stocks in the model leading to low OTD at 62%, and Service Level at 61%, since the seasonal demand pattern trend was dominant in this scenario. On the other hand, the RP and the MO models presented service level and OTD values higher than 90%. The difference between both is that the MO model had slightly better performance in service level, 5% more, in OTD, 2% more, and with 5 weeks of delays, while the RP model had 27 weeks of delays. In scenario 1, the average procurement quantity of the MO model was closer to the quantity of the EOQ model; in this case, the procurement quantity was like the RP model. The utilization rate of the employee capacity was lower than 80% for the EOQ and RP models, while the MO model had a 99% utilization leading to almost 20% fewer storage costs.