Forecasting inventory is the process of predicting future demand for product and determining how much inventory should be stocked in order to meet the predicted demand. In essence, it enables businesses to plan ahead and ensure they have the right amount of stock on hand at any given time. It also helps them avoid costs associated with overstocking or under stocking, as well as maximize customer service levels. By accurately forecasting inventory needs, businesses can confidently make decisions that will help maximize profits and minimize waste.