Supply chain glossary
Demand Forecasting
What demand forecasting is, what goes into an accurate forecast, and how accuracy is measured.
30. july 2026
1 min
Demand forecasting is the process of estimating future customer demand for products, typically per SKU, location and day or week. It is the foundation of supply chain planning: purchasing, replenishment, production, capacity and promotions all depend on how accurate the forecast is.
Modern demand forecasting combines statistical models and machine learning with signals such as sales history, seasonality, promotions, price changes and calendar events. No forecast is perfect – the goal is a forecast with known, managed error that planning can absorb.
- Inputs – cleansed sales history, promotions, prices, product attributes, external signals
- Outputs – expected demand per SKU, location and period, with expected error
- Accuracy metrics – MAPE and forecast bias, measured at the level where decisions are made
Demand forecasting in practice
Veritico STOCK builds the forecast per SKU and store or warehouse and turns it directly into replenishment orders – see demand forecasting and inventory optimization. Why a better forecast alone does not fix availability: Better Demand Forecasting Won't Fix Your Stockouts. Execution Will.
Related terms
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MAPE
What MAPE measures, the formula and a worked example, why it is undefined at zero demand and how minimising it biases forecasts downwards.
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Forecast Accuracy
What forecast accuracy measures, the formulas behind it, and why the same forecast reports 90 % at one level of aggregation and 55 % at the level orders are placed.
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Demand Planning
What demand planning is as a process, how it differs from demand forecasting, and how to tell whether manual adjustments to the forecast add value or subtract it.
20. august 2026
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