Supply Chain Management

Demand forecasting is critical to the efficient functioning of the supply chain process. It forms the basis for the planning activities in the supply chain. An accurate forecast optimizes the inventory level and improves the supply chain's responsiveness. In this chapter, we understood the concept and process of forecasting.

First we studied key components that are involved in a forecast: base demand, seasonal factors, trends, cyclical factors, promotions, and irregular quantities. After this, we examined two types of forecasting approaches: top-down and bottom-up. Later, we explored in depth the process of forecasting in a supply chain.

Thereafter, we examined the three types of forecasting methods: .Qualitative, quantitative and causal. Then, we examined the two time series forecasting techniques, (static as well as adaptive) in detail. With the help of examples, we studied the three key adaptive forecasting techniques, namely, moving averages, simple exponential smoothing technique, and trend-adjusted exponential smoothing.