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Demand planning is a supply chain management process. It is the prediction of what a company intends to sell in the future (i.e., future demand). It involves determining what demand there will be for each product a company sells and then building plans to support this estimated demand.

Demand planning can help businesses avoid the perils of overstocking such as increased inventory carrying costs and financial situations that require the use of product discounts or other temporary measures to alleviate overstocking by selling inventory as quickly as possible.

Demand Planning Process: 10 Essentials Steps For Accurate Forecasting Step 1: Form a core group to work on the demand planning process. Step 2: Analyze and agree upon a set of assumptions. Step 3: Create granular models. Step 4: Generate responsive time periods. Step 5: Produce a range of demand planning forecasts.

The key components that drive the success of demand planning are: Statistical Forecasting. This element uses mathematical models and historical data to objectively predict future demand, providing a data-driven foundation for effective demand planning. Product Portfolio Management. Trade Promotion Management.

Demand planning software forecasts how many of your products and services will be sold in the future. Your business can use it to create a demand plan, which will help you set inventory levels, plan production, create manufacturing schedules, and drive other parts of your supply chain.

Demand planning is important because it achieves strategic objectives by enabling cost reduction through accurate demand forecasts. It also enhances customer satisfaction by ensuring product availability and optimizes resource allocation to prepare for future demand without excess expenditure.

Necessary integrations: ERP, CRM, an inventory system, order management software, etc. Implementation time: 610 months for custom demand planning software. Development costs: $160,000$350,000, depending on the solutions complexity.

Demand planning software is a specialized tool designed to support and enhance the process of forecasting and managing customer demand across various stages of the supply chain.