What is the focus of demand forecasting in supply chain management?

The focus of demand forecasting in supply chain management is primarily on predicting future customer demand. This process involves using various analytical methods and historical data to anticipate how much product will be needed in the future based on factors such as market trends, seasonal variations, and consumer behavior. Accurate demand forecasting is crucial as it directly influences inventory management, production planning, and service levels, ultimately helping organizations align supply with anticipated demand.

By accurately predicting future demand, supply chain managers can optimize stock levels, reduce waste, and improve customer satisfaction through better product availability. This proactive approach is fundamental for minimizing costs and enhancing overall efficiency within the supply chain.

Other options present less effective or relevant approaches. For example, simply estimating past sales records does not account for future market conditions and can lead to shortages or excess inventory. Avoiding analytical methods would hinder the ability to make informed forecasts, while relying solely on supplier inputs may not provide a complete picture of market demand.