2
Understanding Customer Demand: Forecasting
2.1 Overview
Forecasts of future demand provide the basis for supply chain decision making. For an original equipment manufacturer (OEM) or a supplier, customer demand information is needed in order to make a production plan. For a retailer, customer demand information is needed to make replenishment decisions. To forecast demand, one must first identify the factors that influence future demand and then understand the relationships between these factors and future demand. Factors that influence future demand include
• Product characteristics
• Past demand
• Economic condition
• Competition
• Planned marketing efforts
• Planned price discount
Understanding the impact of these factors ...
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