Page 82 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Anand Thakur, Lovely Professional University
Unit 4: Demand Planning and Forecasting

Unit 4: Demand Planning and Forecasting Notes

CONTENTS
Objectives
Introduction
4.1 Demand Forecasting

4.1.1 Forecasting Methods
4.1.2 Accuracy and Validation Assessments
4.2 Collaborative Forecasting
4.3 Collaborative Planning, Forecasting and Replenishment (CPFR)
4.4 Quantitative Methods

4.4.1 Time Series
4.5 Summary
4.6 Keywords
4.7 Review Questions
4.8 Further Readings

Objectives

After studying this unit, you will be able to:
 Understand the Demand Forecasting

 Explain the Collaborative Forecasting
 Discuss the Collaborative Planning, Forecasting, and Replenishment (CPFR)
Introduction

Demand planning and forecasting is a business process that involves predicting future demand
for products and services and aligning production and distribution capabilities accordingly. It
involves a number of different business functions and requires the sharing of timely data,
accurate processing of this data and agreement on joint business plans along the supply chain.
Forecast and demand planning is the process of identifying and forecasting recipient needs to
ensure that the end client consistently receives the required quantities of commodities at the
right time and location, and in the most cost-effective manner. Demand Planning and Forecasting
is both an art and a science. It requires informed judgment, business expertise, and technical
skills. Done well, it can provide a true competitive edge and increased sales, while managing
inventory and maintaining best-in-class customer service. Forecasting depends on both a
structured process and modelling. Both are equally important. In this workshop, we will describe
not only the fundamentals of forecasting and planning, but also why the forecasting process is
important and what role it plays in demand planning.

4.1 Demand Forecasting

Our vision of the future guides us in deciding what product to provide, what process to use, and
what values are to be provided to the customers. We need to be able to see around the corner to

LOVELY PROFESSIONAL UNIVERSITY 77