CHAPTER 3

Demand Planning

Demand planning is the process of understanding customer and market perceptions of the company’s products and specifying an accurate picture of future revenues and sales volumes. The benefits are easy to understand: good management of demand will help improve customer service and relationships, a paramount goal for most companies. An accurate forecast will also serve to align supply with demand, resulting in lower inventory and capacity levels and reduced waste and costs.

The availability of demand-related information has increased dramatically in this increasingly digital world, but courses and textbooks on demand planning still expound on traditional forecasting methods, mainly time series (i.e., ­forecasts generated ...

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