Integrating Forecasting and Inventory Decisions at IKEA Food

Abstract

The paper proposes a novel approach that jointly optimises demand forecasting and inventory decisions for IKEA Food restaurants. Using a ‘bound-and-shave’ method, optimal thawing quantities are estimated, taking into account uncertain demand and the sharing of ingredients between dishes. Tested in eight Belgian restaurants, the approach can reduce food waste by up to 74.7% and operational costs by 50%.