Demand Planning
What is it?:
The development of a sales forecast for future periods by product, by location. Ie. What do you expect to sell in any given period in the future. Forecasts are overlayed with Market Intelligence relating to promotional activity or competitive activity (both internal and external). It is the first step to buying what you intend to sell.
Stock is carried to sell. Firstly you need to know how much you are likely to sell and then plan for ancillary activities to increase (or decrease) sales. Once finalised this is a key feed into requirements planning. Tier 1 demand planning systems are highly accurate for commodity products to end consumers, removing a lot of sales force time in creating base forecast.