You need to make sure your shelves are fully stocked with the items your customers need so they keep coming back and recommend you to their friends and family members. One of the best ways to do that is to implement demand forecasting into your business process. This solution can have a number of benefits to your bottom line, helping to make your business more successful.
Types of Forecasting
First and foremost, you need to understand the different types of demand forecasting and how they can benefit your business to ensure you make the right choice.
- Qualitative Forecasting — This method of demand forecasting is best used by newer businesses or when new products are introduced. This is because it works best when there is a limited amount of data to extract and use. It can also help when customer interest is difficult to gauge.
- Time Series Analysis —When you’re dealing with established products or a clear trend, time series analysis can be the most effective type of demand forecasting. Therefore, older businesses often benefit from this type of analysis.
- Casual Forecasting — This method is best used in more complex situations because it utilizes a vast array of data, including competitors, specific relationships, economic forces and more. Historical data is also a key with this method.
Consider Seasonality and Trends
Many businesses make the mistake of only focusing on one or the other. They may look at what is selling well seasonally or what seems to work best overall throughout the year. This can cause issues with your supply chain, resulting in either too much product at a given time or not enough. It’s critical for businesses to weigh both aspects of demand forecasting equally to make the smartest business decisions. With accurate forecasting, you can stock the items your customers are most likely looking for at any given time.
If you’re interested in making demand forecasting work for you, visit the Demand Solutions website.