Supply Chains: A Manager's Guide

Chapter 10. Forecasting Demand

Managing a supply chain requires planning the production and movement of goods many months into the future. That's a difficult process in itself (see Chapter 11), but the deeper problem is that you can't know in advance how many products customers will buy, so all of your plans are based on guesswork. The first step in planning a supply chain, therefore, is to use the techniques of demand forecasting to make your guesses as accurate as possible. For stable products with a long sales history, you can use standard models that identify trends and project them into the future, as described in the first section of the chapter. You can also group similar products together to improve the accuracy of your forecasts, using ...