Demand Forecasting
Demand forecasting is the practice of predicting future customer demand to plan inventory, purchasing, and production. Distributors use historical orders, seasonality, and trends to set reorder points and safety stock. Better forecasts mean fewer stockouts and less cash trapped in excess inventory.
How demand forecasting works
Forecasts combine historical sales, seasonality, promotions, and known events. The output drives purchasing, safety stock, and reorder points. EDI order history and 852 product activity data give suppliers cleaner inputs than guesswork or spreadsheets alone.
Why forecast accuracy matters
Over-forecast and cash sits in unsold stock; under-forecast and you stock out and miss OTIF. Clean, structured order data is the raw material for a good forecast, which is why accurate order capture feeds straight into planning quality.
Related Terms
Frequently Asked Questions
Demand forecasting is predicting future customer demand to plan inventory, purchasing, and production, using history, seasonality, and trends.
It balances the risk of stocking out against the cost of holding excess inventory. Accurate forecasts cut both lost sales and trapped cash.
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