Production and inventory decisions start with a view of future sales. Demand planning is the process of forecasting customer demand and translating those forecasts into plans for production, procurement, and inventory.

Planners combine statistical forecasts with market intelligence, promotional calendars, and sales input. Consensus meetings reconcile conflicting views into a single demand signal that drives the rest of the supply chain. Accuracy is measured by comparing forecasts against actual orders over time.

Poor demand planning produces either stockouts or excess inventory. Continuous improvement cycles refine models and incorporate new data sources. In volatile markets, planners shorten forecast horizons and increase the frequency of updates.

• Forecasting and planning to meet expected demand
• Combines statistics with market and sales input
• Drives production, procurement, and inventory decisions
• Measured by forecast accuracy over time