Demand Forecasting
The analytical process of predicting future customer demand for products to inform inventory, procurement, and pricing decisions.
Full Definition
Demand forecasting in retail uses historical sales data, seasonality patterns, promotional calendars, and external variables such as weather or economic indicators to generate forward-looking estimates of product demand at the SKU, category, or store level. Accurate forecasts reduce stockouts and overstock situations, directly affecting margin and customer satisfaction. Models range from simple moving averages to sophisticated machine learning algorithms. Editors should note the term is two words, unhyphenated, as a noun phrase. The adjective form 'demand-driven' is hyphenated.
Usage
Usage note: Two words as a noun phrase; do not hyphenate. 'Demand forecast' (noun) and 'demand forecasting' (gerund/noun phrase) are both standard; use consistently within a document.
In Context
- "The demand forecasting model incorporated promotional uplift factors to improve accuracy during the holiday trading period." — Supply chain analytics report
- "Errors in demand forecasting led to a 12% increase in end-of-season markdown costs." — Retail operations post-mortem document