Statistical or judgemental forecasting?

Both. Use statistics for the baseline and judgement only where you have information the history cannot contain.

Demand Planning Fundamentals

How demand planning works, the inputs that matter and how to build a plan the business will actually commit to.

By SupplyChain.management · Last updated September 17, 2026

Demand planning is the process of producing an agreed forward view of customer demand that drives supply, inventory and capacity decisions.

Every downstream plan inherits the demand plan. A weak demand process is the most expensive problem in a supply chain because it multiplies.

A statistical baseline of 9,200 units is adjusted for a known promotion (+1,500) and a lost customer (-600), giving a consensus plan of 10,100 units.

A good demand plan is measured by accuracy and bias, and by whether the business behaves as if it believes it.

Separate baseline statistics from judgement, hold a monthly demand review with named owners, and measure accuracy at the level you plan at.

Letting sales targets replace demand forecasts, and adjusting plans without recording why.

Run the numbers on SupplyChain.tools - this page covers the management decision.

Statistical or judgemental forecasting?: Both. Use statistics for the baseline and judgement only where you have information the history cannot contain.