Fyp Thesis
Fyp Thesis
B.Tech
in
Production Engineering
by
Arunprabhakar P (114120020)
Iyyappan BG (114120050)
Varun M (114120076)
PRODUCTION ENGINEERING
NATIONAL INSTITUTE OF TECHNOLOGY
TIRUCHIRAPPALLI – 620015
MAY 2024
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BONAFIDE CERTIFICATE
Arunprabhakar P (114120020)
Iyyappan BG (114120050)
Varun M (114120076)
in partial fulfilment of the requirements for the award of the degree of Bachelor of Technology
in Production Engineering of the NATIONAL INSTITUTE OF TECHNOLOGY,
TIRUCHIRAPPALLI, during the year 2020-2024.
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ABSTRACT
The textile industry currently analyses historical sales data from individual stores (e.g., 3,000
stores) to forecast demand for upcoming seasons. While leveraging historical trends, this
approach is time-consuming and labour-intensive and needs help to account for broader market
shifts and customer preferences. This project proposes a new method for production demand
forecasting that leverages machine learning and incorporates internal and external factors.
We explore the limitations of using isolated historical sales data and propose a machine
learning-based approach that considers internal factors like production lead time and lost time
alongside external factors like GDP and customer buying ability. By collaborating with textile
vendors, we identified relevant data points and developed machine learning models, including
linear regression and SARIMA. Our results demonstrate that incorporating these additional
This project offers a more comprehensive and efficient approach to production demand
forecasting in the textile industry. By leveraging machine learning and a more extensive range
of data points, companies can better understand customer buying ability and optimise
SARIMA
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Acknowledgement
We would like to express our sincere gratitude to all those who have contributed to our research
on production demand forecasting in the textile industry using machine learning techniques.
First and foremost, we extend our heartfelt thanks to our supervisor for their guidance, support,
and invaluable insights throughout the project. Their expertise has been instrumental in shaping
our research methodology and analysis. We would also like to thank Rycla Overseas for
providing essential data and insights into the textile industry's operations. Their contribution
has been crucial in understanding the intricacies of demand forecasting within the industry.
We express our gratitude to Professors Dr. Matruprasad Rout and Dr.Parthiban for being
our Guide and Co-Guide respectively. We sincerely thank scholar Kamlesh Pant for assisting
Additionally, we express our appreciation to our colleagues for their helpful suggestions and
feedback, which have significantly enhanced the quality of our paper. Their insights have
played a vital role in refining our machine-learning techniques and improving the accuracy of
our forecasting models. To all who have contributed, your support has been invaluable, and we
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TABLE OF CONTENTS
ACKNOWLEDGEMENT iv
ABBREVIATIONS ix
CHAPTER 1 INTRODUCTION
CHAPTER 2 METHODOLOGY
v
3.5 Contribution of this Research 9
CHAPTER 5 CONCLUSIONS 30
REFERENCES 31-32
vi
LIST OF FIGURES
1 Research Methodology 4
2 Project Timeline 6
4 Production in 2023 14
vii
LIST OF TABLES
viii
ABBREVIATIONS
ix
CHAPTER 1
INTRODUCTION
The textile industry has historically navigated a dynamic landscape, constantly adapting to
meet consumers' ever-evolving needs and desires. Today, this dynamism is amplified by the
surge of e-commerce, where fashion trends can change rapidly and unpredictably. In this fast-
paced environment, accurately forecasting production demand has become a critical
differentiator for textile manufacturers. Traditional methods rely on historical sales data from
individual stores and must be revised.
While offering a baseline for production planning, traditional forecasting methods have several
limitations. Firstly, they are time-consuming and labour-intensive, requiring significant manual
effort to analyse vast data. Secondly, these methods focus solely on historical sales data, failing
to capture the broader market shifts and customer preferences that drive demand fluctuations.
They neglect external factors like economic conditions, social media trends, and competitor
activity, which can significantly impact consumer buying behaviour.
1.4 Objectives
Our main objective in this work is to develop and evaluate demand forecasting models tailored
to specific textile products. By carefully comparing the performance of these models, we aim
to identify the most effective demand forecasting methods in the textile industry. We will
achieve this by:
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● Developing ML-based forecasting models: We will explore and implement various
machine learning models suitable for time series forecasting, incorporating both
internal and external factors.
● Evaluating model performance: We will assess the accuracy and effectiveness of
each model through rigorous error analysis and validation techniques.
● Identifying impactful factors: We will evaluate how endogenous and exogenous
factors influence production demand, providing valuable insights for optimising
production processes.
● Providing actionable insights: Our ultimate goal is to equip apparel manufacturers
with actionable insights that will enable them to:
○ Optimise manufacturing processes to meet actual demand.
○ Reduce excess inventory, leading to cost savings.
○ Improve their competitiveness in the market by anticipating trends and adapting
production accordingly.
○ Increase market share by effectively catering to customer needs.
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CHAPTER 2
METHODOLOGY
This project will employ a data-driven approach to develop and evaluate machine learning
models for production demand forecasting in the textile industry. The methodology will be
○ Internal factors that can influence production lead times, such as:
● External Data Acquisition: We will collect data on external factors that may influence
production demand. Sources for this data may include:
○ Financial databases
○ Industry publications
identify factors that have been demonstrated to influence production demand in the
textile industry. This review will encompass both endogenous and exogenous factors.
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● Industry Expert Consultation: We will consult with textile industry experts,
including manufacturers and analysts, to gain insights into the most relevant factors
● Data-Driven Analysis: We will explore the relationships between the collected data
techniques. This will help us identify the factors with the strongest correlations
production demand.
Linear Regression
Random Forest
SARIMA
Polynomial Regression
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2.3 Forecasting Model Selection
Based on the characteristics of our data and the research conducted, we will select appropriate
machine learning models for demand forecasting. Here are some potential models to consider:
factors).
● Time Series Models: These models analyse historical data patterns to forecast future
● Other Machine Learning Models: Depending on the complexity of the data and the
desired level of accuracy, we may explore more advanced models such as Random
● Data Preprocessing: The collected data will be carefully pre-processed to ensure its
quality and suitability for machine learning model development. This may involve
handling missing values, identifying and addressing outliers, and potentially scaling
● Model Training and Testing: The chosen machine learning models will be trained
and tested on a split of the data. The training data will be used to fit the model
parameters, while the testing data will be used to evaluate the model's generalizability
settings) to achieve the best possible performance. This may involve techniques like
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2.5. Error Analysis and Validation
● Evaluation Metrics: We will assess the performance of each model using appropriate
error metrics like Mean Squared Error (MSE), Root Mean Squared Error (RMSE), and
R-squared. These metrics will quantify the difference between the model's forecasts
Once the best-performing model is selected and validated, we will use it to generate future
production demand forecasts. These forecasts will be based on the most recent production data
We may conduct a sensitivity analysis to understand how changes in individual factors (both
internal and external) impact the model's forecasts. This can provide valuable insights for
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CHAPTER 3
LITERATURE REVIEW
The textile industry thrives on its ability to anticipate and cater to ever-evolving customer
demands. However, in the fast-paced world of e-commerce, where fashion trends shift rapidly,
accurate production demand forecasting has become critical for effective inventory
management and successful business operations. Traditional methods, which rely solely on
historical sales data from individual stores, are becoming increasingly insufficient. This
literature review explores the limitations of traditional methods and highlights the potential of
machine learning techniques for more comprehensive and efficient production demand
Traditional forecasting methods, while offering a baseline for production planning, suffer from
several limitations:
● Limited Scope: They focus solely on historical sales data, neglecting broader market
trends and customer preferences driven by social media, economic conditions, and
competitor activity.
rapidly changing trends and may not accurately forecast demand for non-seasonal or
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3.2 Machine Learning for Demand Forecasting
traditional methods. ML algorithms can learn from historical data and identify complex
relationships between various factors that influence production demand. This enables them to
generate more accurate and flexible forecasts. Here's how ML is being utilized in demand
forecasting:
● Improved Accuracy: Studies have shown that ML models can outperform traditional
(production lead time, lost time) and external factors (economic indicators, social
Several studies have explored the application of machine learning for production demand
● Lorente-Leyva et al. (2021, 2020): These studies employed machine learning models
that incorporate both endogenous (internal) and exogenous (external) factors for
● Xin et al. (2021): This research investigated the use of machine learning methods like
K-Nearest Neighbours (KNN) for forecasting demand for textile products, indicating
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3.4 Gaps in Existing Literature
While existing research demonstrates the potential of ML in textile demand forecasting, some
gaps remain:
● Limited Focus on Specific Products: Most studies focus on general textile demand
forecasting, neglecting the need for tailored models for specific product categories
internal and external factors, a deeper understanding of which factors have the most
● Identifying Impactful Factors: We will analyse the impact of various internal and
By addressing these limitations and contributing new knowledge, this research seeks to
advance the application of machine learning for production demand forecasting in the textile
industry.
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3.6 Industry Research
Our project necessitates a comprehensive understanding of the textile industry's production and
supply chain dynamics. To achieve this, we initiated contact with five textile vendors. Our
primary objectives were twofold:
1. Gaining Business Model Insights: We sought to delve into the vendors' business
models, specifically exploring their product development processes and distribution
channels.
2. Data Acquisition for Forecasting: Accessing data relevant to production demand
forecasting was crucial for developing our machine learning models.
While three of the vendors (Asna Garments, Ammaiyappar Textiles, and Sri Geetha Textiles)
declined to participate, valuable information and collaboration were established with
Bhuvaneshwari Textiles and Rycla Overseas. Their willingness to share insights provided a
deeper understanding of the industry's challenges in data collection for demand forecasting
purposes.
To illustrate the complexities and best practices within the textile industry, we detail our
interactions with the following companies:
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3.8 Different types of textile industries:
● Bhuvaneshwari Textiles (Lungis): Their meticulously planned lungi production
process exemplifies their commitment to both quality and efficiency. Despite a fixed
schedule, they consistently maintain predictable monthly production volumes without
any major variation in their monthly production. This interaction provides valuable
insights into a well-managed production environment, highlighting the importance of
standardized processes for consistent output.
Monthly Production: 400 per Power loom Machine
● Rycla Overseas (T-shirts, Track Pants, etc.): Their diverse product portfolio and
robust export network demonstrate their ability to cater to a wide range of consumer
needs across different demographics and geographies. This interaction showcases a
multifaceted approach to production and sales, highlighting the adaptability and market
focus required for success in the global textile industry.
Through our interactions with these companies, we were able to glean valuable insights into
the factors that significantly affect demand in the textile industry:
● Price and Quality: The example of leggings (where Twin Birds succeeded with a
quality focus and Prisma captured the market with lower pricing) underscores the
importance of considering both price and quality in our demand forecasting models.
Consumers often make purchasing decisions based on a balance of these two factors.
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● Non-Productive Time: Garment production facilities often track lost time
(downtime) to optimise production efficiency. This metric, while not readily available
in this instance, can be a valuable input for production planning, as it reflects potential
bottlenecks or areas for improvement within the manufacturing process.
● Endogenous Factors: Our efforts to acquire data on internal factors like production
lead time and lost time proved challenging. The vendors did not have readily available
or well-recorded data on these factors, highlighting a potential gap in their data
collection practices. We will need to explore alternative methods for obtaining this type
of data, such as conducting surveys or on-site observations within textile manufacturing
facilities.
● Exogenous Factors: Data on external factors like GDP and Exchange rates was
successfully obtained through web research. These factors can significantly impact
production demand by influencing consumer spending power and import/export costs.
ENDOGENOUS FACTORS:
EXOGENOUS FACTORS:
● Exchange Rates
● Interest Rates
● GDP
● GWP
● Repo Rate
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3.11 Moving Forward
Despite the challenges in obtaining comprehensive endogenous data, the insights from
collaborating with the vendors and the collected exogenous data will provide a solid foundation
for developing our machine learning models for production demand forecasting. We will
continue to explore alternative methods for acquiring internal data points and refine our data
collection strategy to ensure the most accurate and comprehensive forecasting models possible.
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CHAPTER 4
We focus only on the Production of T Shirts category in our analysis. In the final data set, the
‘PRODUCTION” field refers to the total number of T Shirts produced per month. Rest are self-
explanatory Exogenous Factors.
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4.2 Model Selection and Development:
Our project will explore several machine learning models for production demand forecasting
in the textile industry. We will compare their performance to identify the most effective
approach for our specific data and forecasting needs. Here's a breakdown of the models we will
consider:
1. Linear Regression:
● Model Description: This time series model is well-suited for forecasting data with
seasonal patterns. It takes into account past values of the dependent variable
(production quantity), lagged error terms (differences between forecasts and actual
values), and seasonal components.
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● Implementation in our project:
Depending on the complexity of our data and the desired level of accuracy, we may explore
more advanced models:
● Random Forests: This ensemble learning technique combines multiple decision trees
to improve prediction accuracy and reduce overfitting. It can handle both numerical
and categorical variables.
● Gradient Boosting Machines: This sequential learning approach builds an ensemble of
decision trees, where each subsequent tree learns from the errors of the previous ones,
potentially leading to higher accuracy.
1. Data Preprocessing: Clean and prepare the data by handling missing values,
identifying outliers, and potentially scaling features for better model performance.
2. Model Training and Testing: Split the data into training and testing sets. Train the
model on the training data and evaluate its performance on the unseen testing data.
3. Hyperparameter Tuning: Optimize the model's hyperparameters (adjustable settings)
to achieve the best possible performance. Techniques like grid search or randomized
search can be employed.
4. Model Comparison: Evaluate and compare the performance of different models using
error metrics like MSE, RMSE, and R-squared. The model with the highest accuracy
and lowest error rate will be considered the best performing model.
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By following these steps and comparing the results of various models, we can identify the most
effective approach for forecasting production demand in the textile industry, considering both
internal and external factors.
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b. Considering with Factors:
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2. ARIMA Model:
a. Considering With Factors:
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3. SARIMA Model:
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R square Value = 0.45
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b. Considering with Factors:
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R Square Value = 0.998
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4. Polynomial Regression Model:
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R Square Value = 0.61
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b. Considering with Factors:
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5. Random Forest:
a. Considering with Factors:
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Figure 17 – Comparison of Forecasted Production for different Models
Insight:
SARIMA model considering the factors has been found to be the best of all the models
considered.
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CHAPTER 5
CONCLUSIONS
We applied five machine learning models and assessed their accuracy. Firstly, we examined
Linear Regression and SARIMA models, both with and without considering the effect of
factors. Additionally, we developed a Polynomial Regression model, ARIMA and Random
Forest model.
Upon comparing the accuracy of all models, the SARIMA model, when factoring in the effects
of relevant factors, emerged as the most accurate among those considered.
In conclusion, our research highlights the importance of accurate demand forecasting for
achieving high-performance textile production. By mitigating production fluctuations, aligning
production with customer needs, and optimizing resource allocation (machinery, labor), a well-
performing forecasting model can significantly improve overall productivity. This translates to
a more stable, efficient, and customer-centric operation within the textile industry.
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REFERENCES
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Machine learning–assisted efficient demand forecasting using endogenous and
exogenous indicators for the textile industry.
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