2 Introduction to demand forecasting
As highlighted in the 5-step framework above, this chapter will begin our improvement journey by discussing the objective of demand planning. Before jumping into how to make a good forecast, we need to understand why we forecast demand in the first place.
2.1 Why do we forecast demand?
Making smart decisions requires insights. Imagine you want to buy a house. You will want to know the current state of the house, if you should plan for significant expenses, the neighborhood’s current prices, how they will evolve in the future, and so on. In supply chains, most decisions—how much to buy, produce, ship, and ...
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