July 17, 2023
How do you create a Demand Plan?
In this video, we discuss the two approaches to creating a demand planning forecast: manual and statistical. We look at the advantages and disadvantages of each approach, and we discuss how they can be combined to create the most accurate forecast.
Demand planning is the process of forecasting future demand for products or services. This forecast is then used to make decisions about inventory levels, production schedules, and marketing campaigns.
There are two main approaches to creating a demand planning forecast: manual and statistical.u003cbru003e- Manual forecasting involves entering the forecast into a spreadsheet or system table by hand. This can be a time-consuming and error-prone process, but it gives planners the flexibility to incorporate their own judgment into the forecast.u003cbru003e- Statistical forecasting uses a mathematical method to generate a forecast. This can be a more accurate approach, but it requires historical data and can be difficult to implement.
In practice, most demand planning organizations use a combination of manual and statistical forecasting. This allows them to take advantage of the strengths of both approaches.
For example, a planner might start with a statistical forecast and then adjust it manually to account for known factors that could impact demand.
The best approach to demand planning will vary depending on the specific business and the type of product or service being forecast. However, by understanding the two main approaches, businesses can make informed decisions about how to create the most accurate forecast.
