ABSTRACT
Forecasting There are products that the customer wants delivered immediately. When you go to a hardware store you do not want to place an order to buy a box of nails or a hammer. You expect to be able to carry them home. It is still necessary to estimate final demand for these consumer items. This process of estimating final consumer demand is called forecasting. In a well-run supply chain only the final consumer demand is forecasted. All of the components that go into the product do not have to be forecast, because they can be calculated based on the forecast for consumer demand. For example, if there is a forecast by a retail store that it will sell 100 24" bikes in June, the bike manufacturer knows that they will need 100 front wheels and 100 rear wheels. These components do not have to be forecast.
