## 5 Forecasting for Mass Customization  
Forecasting in the mass customization industry is difficult because end products are very numerous, and, due to volatility, they may have a short demand history or the demand is sporadic. Data analysis showed that the demand profile of a single finished product is often sporadic or has large random fluctuations. Typically, single final product demand has no seasonality or trends. Forecasting on small quantified data and occasional demand generates large forecast errors. On the other hand, many of the final products have common intermediate goods, which are the main element of manufacturing. Therefore, we have proposed an approach that distinguishes key intermediate goods and forecasts finished products with common intermediate goods together. We proposed adding part groupings that have the same key intermediate goods and forecast product groups rather than individual parts. The proposed algorithm checks in the ERP system which final products have the same key intermediate goods product in the BOM, according to the algorithm described below. Developing an algorithm that groups products appropriately required analysing their bills of materials (BOM). BOMs in the mass customization industry are multi-level and complex. In addition, the same intermediate assemblies can be in multiple products at different BOM levels and in the same product more than once, also at multiple levels. A key intermediate good is one of the intermediate assemblies that is mass-produced and is at the lowest possible BOM level (sometimes it is also the final product). Such a distinction is important because between the production of a key intermediate good and the final products should not include many operations from the technological route, and thus should not be far apart in time. Going too far into the product structure would result in the grouping of too many final products that are not at all similar. Figure 2 shows an example of possible multi-level BOMs. In order to determine the key intermediate goods, we analysed the following data:  
* BOMs, which contained hierarchy information that determined the level of the inventory part in the graph. A value 0 means that the part is a finished product, while a value of 1 means that the part is an intermediate product on a level 1 in the BOM. Similarly, for values of 2, 3, and higher. Level 3 intermediates form level 2 intermediates, level 2 intermediates form level 1 intermediates, and level 1 intermediates form the finished products. We had information about the _id_ of the inventory part and the _id_ of the final product, so if the value of _hierarchy_ is 0, then _id_ of inventory part and _id_ of final product are the same in the dataset. We did not take into account the amount of upstream intermediates that goes into downstream products;
* ABC and XYZ analysis--ABC analysis divides an inventory into three categories related to the value of inventory costs. 'A' parts are very important for an organization. 'B' parts are important, but of course less important than 'A' items and more important than 'C' parts. 'C' items are marginally important. XYZ classification is one method of classifying resources according to regularity of demand, it implies a division by rate of consumption or sales: X-high rate of consumption, Y-medium rate of consumption, and Z-low rate of consumption. Through these analyses, we get a breakdown of products and intermediates into nine groups: AX, AY, AZ, BX, BY, BZ, CX, CY, and CZ. The proposed algorithm for selecting the key intermediate goods is as follows:  
1. Reading the level 0 position;
2. Checking whether there is a level 0 part that is at level 1 or higher in the hierarchy of another finished product. If so, check that there is no other finished product in this hierarchy. If not, we assigned products to one group, if so, the ABC/XYZ category was checked and the item was assigned to the group with the higher category value. If the ABC/XYZ analysis did not give a clear answer, the company planner should decide;
3.