Inventory Demand Planning Definition
Inventory demand planning is the process of forecasting inventory needs and ensuring that adequate stock is on hand to meet customer demand. The goal of inventory demand planning is to minimize stockouts while maximizing inventory turnover and profitability.
To create an accurate forecast, businesses need to consider a variety of factors such as historical sales data, seasonality, customer trends, marketing campaigns, and new product launches. Once the forecast is created, businesses need to develop a plan to ensure that adequate stock is available when demand increases. This may involve working with suppliers to increase production or delivery frequency, stockpiling inventory in advance of peak periods, or using just-in-time methods to minimize waste.
The most successful businesses are those that can strike a balance between meeting customer demand and minimizing excess inventory. By using inventory demand planning, businesses can keep their shelves stocked with the products customers want, without tying up too much capital in excess inventory.
