July 17, 2023
Demand planning horizon
In this video, we will discuss the importance of the horizon in demand planning. We will explain what the horizon is, how to determine the right horizon for your organization, and why it is important to get the horizon right.
Demand planning is the process of forecasting future demand and making decisions based on that forecast. The horizon is the time period over which the demand plan is created. The horizon is important because it determines the decisions that can be supported by the demand plan.
For example, if the horizon is six months, then the demand plan can be used to make decisions about production, inventory, and marketing. However, if the horizon is only one month, then the demand plan can only be used to make decisions about inventory.
The right horizon for your organization depends on the lead times of your supply chain. The lead time is the time it takes to produce, deliver, and sell a product. The lead times of your supply chain will determine how far out you need to forecast in order to make informed decisions.
If you get the horizon wrong, it can have a significant impact on your business. If the horizon is too short, you may not have enough time to make the necessary adjustments to your supply chain. If the horizon is too long, you may be wasting resources on products that will not be needed.u003cbru003e
