GlossaryEN1 min readUpdated: Jun 26, 2026
Demand forecasting
Demand forecasting estimates how many units of a product or service customers will order over a defined future period.
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Source: https://www.investopedia.com/terms/d/demand-forecasting.asp
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Definition & Explanation
Demand forecasting estimates how many units of a product or service customers will order over a defined future period. Analysts draw on historical sales data, seasonal patterns, market trends, and qualitative input from sales teams to build these projections. Across the supply chain, the demand forecast drives virtually every downstream planning decision: procurement volumes, production schedules, warehouse capacity, and carrier bookings all depend on it. Statistical methods such as moving averages and exponential smoothing remain widely used, but machine-learning models are increasingly applied where large datasets and complex demand signals are available. Demand forecasting differs from inventory forecasting in focus: the former asks what customers will buy; the latter determines how much stock must be on hand to fulfil that demand.
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