Introduction:

Imagine being able to predict what your customers will want to buy next month or even next season. That’s what demand forecasting is all about—anticipating future customer demand to ensure you have the right products available at the right time.

Definition:

Demand forecasting is the process of estimating future demand for your products based on historical sales data, market trends, and other relevant factors.

How It Works / Examples:

Let’s say you run an online store selling seasonal clothing. By analyzing past sales data, you notice that wool sweaters sell out quickly every November. Using this insight, you can forecast increased demand for wool sweaters as November approaches and stock up accordingly, preventing stockouts and meeting customer expectations.

Why It Matters:

Accurate demand forecasting helps you maintain optimal inventory levels, reducing the risk of overstocking or stockouts. This balance not only saves on storage costs but also ensures that customers find what they’re looking for, enhancing satisfaction and loyalty.

Additional Resources:

Learn more about Demand Forecasting.