Supply Chain Forecasting

Supply chain forecasting is an important process for any company that manufactures a product. It is important because it helps the company plan for future demand and production.

Supply chain forecasting has been around for many years. However, in recent years there have been significant changes in the way that companies forecast demand, supply and pricing of their products. One of these changes has been the increased use of predictive analytics to help make more accurate forecasts.We can break down demand forecasting into two types: Quantitative forecasting and Qualitative forecasting. Under this 2 forecasting type are 10 different methods you can follow


Quantitative forecasting is a data-driven mathematical process used by sales teams to analyze performance and forecast future revenue based on historical data and patterns

5 Quantitative Forecasting Methods

  1. Moving average – is the simplest statistical forecasting method you could use. It uses historical data to forecast sales for an upcoming period of time. Although this is the simplest method, this doesn’t account for seasonality or trends in your forecasts.
  2. Exponential smoothing – is similar to moving average forecasting but puts greater weight on the most recent data sets.
  3. Adaptive smoothing – provides a more in-depth analysis of your sales trends, building on exponential smoothing and taking seasonality into account.
  4. Regression analysis – this method makes assumptions through algorithms that look at the relationship between several variables.
  5. Life cycle modeling – can help predict the long-term demand trend for a new product by analyzing post-launch demand, allowing you to ensure you have enough inventory to meet both short-term and long-term demand.


Qualitative forecasting is a method of forecasting a company’s finances that relies on expert judgment because there is no historical data available.

5 Qualitative Forecasting Methods

  1. Delphi method – involves questioning a group of experts or advisers independently in person or via a questionnaire. This method is widely considered one of the most effective long-term supply chain forecasting approaches.
  2. Historical data analysis – it’s historical data analysis coming from the closest product data available.
  3. Market research – is one of the most tried and tested techniques. This method is used to know whether there is consumer demand for a new product at all.
  4. Sales force composition – this method is essentially an internal consultation in which stakeholders from different departments in your company provide their own opinions
  5. Focus groups – an extension of market research, focus groups involve bringing together up to a dozen people from your target market to engage in an open-ended discussion.

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