Predict Tomorrow’s Demand Utilizing Yesterday’s Knowledge

Whereas AI fashions have taken the highlight, conventional statistical fashions stay extremely useful instruments for demand forecasting

Photograph by petr sidorov on Unsplash

Howdy Medium readers!

In the present day, we’ll dive into forecasting methods utilized to demand planning, a discipline that I’m extremely invested in attributable to my provide chain background and fervour for information science. Not too long ago, I’ve been studying up on this subject, revisiting books and articles on demand forecasting to offer you some contemporary insights.

To kick issues off, let me share a thought-provoking quote by British statistician George E. P. Field:

“All fashions are fallacious, however some are helpful.”

As you mirror on this quote, you may marvel: why even hassle forecasting the longer term if no mannequin can ever be totally correct? Consider it like climate forecasting: it helps us plan forward. Ought to I convey an umbrella tomorrow? Ought to I placed on sunscreen? Ought to I take shelter from a hurricane? Forecasts, whereas imperfect, information us in making higher selections.

In demand planning, it’s no totally different. Demand planners and different firm stakeholders use forecasts to anticipate future wants and regulate