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27th October 2022

What is Demand Forecasting, and What are its Advantages?

Demand planning is a broader process in organizations in various industries, such as manufacturing, retail, consumer goods, and logistics that encompasses forecasting as one of its key components. It involves analyzing historical data, market trends, and other factors to estimate future customer demand for a product or service.

Demand planning goes beyond just generating a forecast by also considering various aspects such as inventory management, production scheduling, and resource allocation. These can be done by making use of demand planning software.

Forecasting, on the other hand, specifically refers to the process of predicting or estimating future demand based on historical data and statistical techniques. It involves analyzing patterns, trends, and factors that influence demand to generate numerical projections.

In essence, forecasting is a subset of demand planning. It provides the foundation for making informed decisions about inventory levels, production quantities, and supply chain management.

Infographic created by Marotta Controls, Offering High-Performance Control Systems Developed Fully In-House

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