Demand Forecasting

Term from Inventory Management industry explained for recruiters

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."

Examples in Resumes

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"

Also try searching for:

Demand Planner Supply Chain Analyst Inventory Planning Manager Demand Planning Analyst Supply Chain Planner Forecasting Specialist Inventory Analyst

Example Interview Questions

Senior Level Questions

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.

Mid Level Questions

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.

Junior Level Questions

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.

Experience Level Indicators

Junior (0-2 years)

  • Basic data analysis and spreadsheet skills
  • Understanding of supply chain basics
  • Knowledge of inventory management principles
  • Basic statistical concepts

Mid (2-5 years)

  • Advanced forecasting techniques
  • Experience with planning software
  • Strong analytical problem-solving
  • Understanding of market trends

Senior (5+ years)

  • Strategic planning expertise
  • Cross-functional team leadership
  • Advanced modeling techniques
  • Business process optimization

Red Flags to Watch For

  • No experience with data analysis or statistical concepts
  • Poor understanding of supply chain basics
  • Lack of experience with forecasting software or tools
  • Unable to explain basic inventory management principles
  • No knowledge of how promotional activities affect demand