ABSTRACT
For effective supply chain management, businesses need a reliable forecast to start with because demand forecast is the basis of supply chain planning and performance. Ideally, forecast should meet the customer demand. However, forecast will depend on many internal and external factors impacting the business performance, and some of those factors are not controllable like seasonality in demand. Inaccurate demand projections can have disastrous implications on the company’s business performance. Broadly, forecast can be for short, medium and long terms. Also, forecast can be at different levels of aggregation. Forecasting methods can broadly be classified as qualitative, extrapolation and quantitative, and there are different methods of forecasting under each broad category. The major component of demand management is forecasting the amount of product that will be purchased by the end users and in the integrated supply chain all other demands will be derived from the primary demand. The various methods are applied by the businesses depending on the situation and influence of various factors. Industry, however, uses the simplest techniques as they have the experience of past performance of demand generated by the various consumer groups.
