What is the primary goal of demand forecasting?

The primary goal of demand forecasting is to predict future customer demand. This involves using historical data, market analysis, and statistical tools to estimate what customers are likely to purchase in a given timeframe. Accurate demand forecasting is crucial for companies as it helps in managing inventory levels, determining production schedules, and aligning resources effectively to meet customer needs. By anticipating the demand, businesses can better plan their operations, reduce waste from overproduction or stockouts, and enhance customer satisfaction by ensuring that products are available when needed.

While assessing employee performance, enhancing supplier relationships, and optimizing production staffing are all important aspects of operations management, they are secondary consequences of effective demand forecasting rather than the main goal. The focus should remain on understanding and anticipating customer needs to drive business success.