Demand forecasting is a business practice that helps companies predict how much product they'll need in the future. It's like having a crystal ball that uses past sales data, market trends, and other factors to make educated guesses about future customer demand. This helps businesses keep the right amount of inventory - not too much (which wastes money) and not too little (which disappoints customers). Companies use this process to make smarter decisions about ordering products, planning staff schedules, and managing warehouse space. Similar terms you might see include "sales forecasting," "predictive analytics," or "demand planning."
Reduced excess inventory by 30% through implementing Demand Forecasting systems
Led Demand Planning initiatives resulting in 95% forecast accuracy
Utilized Demand Forecasting techniques to optimize seasonal inventory levels
Implemented Demand Analytics solutions to improve supply chain efficiency
Typical job title: "Demand Planners"
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Q: How would you handle a situation where actual demand significantly differs from the forecast?
Expected Answer: A senior planner should discuss creating flexible contingency plans, maintaining safety stock levels, having backup suppliers, and adjusting forecasts quickly based on real-time data. They should also mention how to communicate changes to stakeholders.
Q: How do you determine which forecasting method is most appropriate for different products?
Expected Answer: Should explain how different products need different approaches - like how seasonal items need different planning than steady sellers, and how to look at product history and market conditions to choose the right method.
Q: What factors do you consider when creating a demand forecast?
Expected Answer: Should mention historical sales data, seasonal trends, market conditions, promotional activities, competitor actions, and economic factors that might affect demand.
Q: How do you measure forecast accuracy?
Expected Answer: Should explain common measurements like forecast error percentage, explain why accuracy is important, and how to improve it over time using actual vs. predicted numbers.
Q: What is the difference between qualitative and quantitative forecasting?
Expected Answer: Should explain that quantitative uses numbers and past data, while qualitative relies on expert opinions and market research. Should give basic examples of each.
Q: Why is demand forecasting important for a business?
Expected Answer: Should explain how it helps with inventory management, cost control, customer satisfaction, and overall business planning.