Which of the following can be a consequence of poor demand forecasting?

Poor demand forecasting can lead to increased inventory costs because when predictions about customer demand are inaccurate, it can result in either surplus inventory or stockouts.

When demand is overestimated, a company may produce or order more products than needed, leading to excess inventory that incurs costs related to storage, potential obsolescence, and capital tied up in unsold goods. Conversely, when demand is underestimated, the company may not have enough products to meet customer needs, leading to lost sales and increased costs associated with expedited shipping or emergency orders to fulfill demand quickly.

Ultimately, accurate demand forecasting is essential for optimizing inventory levels, minimizing costs, and ensuring a responsive supply chain that meets market needs without incurring unnecessary expenses.