Demand forecasting and inventory management is the process of planning for future inventory needs. It involves analyzing historical sales data, predicting customer demand, market trends, and other factors to inform decisions about how much inventory should be kept on hand. By accurately forecasting future demand, companies can better manage their resources and ensure they have enough stock available to meet customer needs without overstocking or running out. The goal is to create a balance between having too much and too little inventory, while also minimizing costs such as storage and handling fees.