Demand Forecasting:

Demand Forecasting is the process of estimating future demand in terms of the quantity, timing, quality, and location for wanted products. In any industrial enterprise, forecasting is the first level decision activity. This is the demand of a particular product must be available before taking up any other decision problems like materials planning, scheduling, implementation of production system. Forecasting provides a basis for coordination of plans for activities in various parts of a company.

Why Forecast?

The easy answer is: To plan the future. A basic axiom of planning is that it cannot be done without some forecast of the future.

What to Forecast?

A concise answer is: Everything one must know to plan the future. This covers such things as product demand and supplies, prices, costs and lead times. In this unit we shall limit ourselves to the key factor in most of the production planning and control systems - the demand for an item.