demand forecasting

Syllable breakdown

Dictionary meaning

the process of estimating future customer demand for a product or service over a specified time horizon using historical sales data, statistical models, market research, causal variables, and increasingly machine learning algorithms; accurate demand forecasting is foundational to supply chain planning, enabling organisations to make informed decisions about production scheduling, inventory levels, procurement, workforce planning, and distribution capacity; forecast error, which measures the deviation between predicted and actual demand, is a key performance indicator in supply chain management, with over-forecasting leading to excess inventory and under-forecasting causing stockouts and lost sales