Examples of prediction functions

What's the use of demand forecasting? The concept of demand forecasting and the function of forecasting at three levels

Xu Xu's original management and workplace.

February 16 creators of high-quality workplace

Xiao Fan, because of COVID-19, has been isolated at home. However, he has never been idle and is very motivated. I watched my courses on production site management and warehouse management two days ago and was asked about the knowledge of demand forecasting.

He asked me, is prediction fortune telling? What exactly is demand forecasting? What is the use of demand forecast for enterprise management?

As for the content of demand forecasting, I have two columns, namely, Exponential Smoothing Detailed Interpretation and Linear Regression Analysis, which introduce the common methods of demand forecasting in detail. However, there is no formal column introduction about the basic knowledge of demand forecasting (the content asked by this fan) (it is planned to be launched later). Since this friend mentioned it, today I will briefly talk about what demand forecasting is and its role in implementation, management and strategy.

First of all, what is forecasting.

To understand demand forecasting, you need to know what forecasting is first.

Prediction is the prediction or speculation of possible future events.

Judging from this definition of prediction, prediction is very similar to fortune telling. They are all predictions and speculations about the future, but they are not the same. Because the prediction and speculation of the forecast is the result of qualitative and quantitative analysis or calculation on the basis of a large number of data or surveys. Those results obtained by simply patting the head without analysis and calculation are not called predictions, but fortune-telling.

Second, what is demand forecasting?

As mentioned above, prediction is a prediction or speculation of possible events in the future, but in our world, everyone has a future and everything has a future. Therefore, the forecast involves a wide range, and we need to classify the forecast before further study.

For example, according to the different scope and content of the forecast, we can divide the forecast into economic forecast, technical forecast, education forecast, demand forecast and so on.

Demand forecast refers to the prediction or speculation of customers' future demand for our products (or services). The future demand here refers to the demand quantity (amount) in a certain period of time in the future. According to this description, the definition of demand forecast can be summarized in one sentence: demand forecast refers to the prediction or speculation of customers' demand for our products (or services) in a certain period of time in the future under a certain series of conditions.

The definition of this demand forecast includes the following three aspects.

1, "a specific set of conditions". It refers to various factors that will affect sales at a specific time in the future (that is, during the forecast period), such as price, promotion, competitor trends, industry events, policy changes, seasonal changes, etc.

2. "Demand in a certain period in the future". First of all, it refers to the future, and the forecast is future-oriented; Secondly, it refers to the time period faced by demand forecasting in the future, not the time point. Thirdly, predict the forecast object (that is, the products or services we predict); Finally, forecast is demand, which generally refers to sales quantity or sales amount.

3. "Forecast and speculation" refers to the use of corresponding forecasting techniques and the selection of appropriate forecasting models to forecast or speculate on future sales.

Third, the role of demand forecasting at three levels.

What's the use of demand forecasting? This is a problem for my fans. In fact, this is a big problem, involving a wide range, and I can't go deep into this short article. Here, I only talk about the role of demand forecasting from the enterprise management.

1, the role of demand forecasting at the implementation level.

Demand forecasting is the basis and main input of supply chain planning. Supply chain planning includes demand planning, production planning, procurement planning, etc., all of which require demand forecast data. It can even be said that without prediction, there is no plan at the implementation level.

For example, how much capacity a product needs to arrange next week and how much materials need to be stored, all of which need to be based on the data of demand forecast. If there is a promotion, we predict that the shipment of this product will increase greatly next week. At this point, we should follow up and adjust the production plan and material procurement plan of this product accordingly.

2. The role of demand forecast in management.

The main function of demand forecast at the management level is to provide data support for short-term personnel demand, capacity distribution and supplier capacity reserve.

For example, when the peak season comes, we predict that the performance will increase by more than 65,438+050% in the next three months. At this time, we need to prepare our personnel, our production capacity and materials for this possible growth of 65,438+050%, and inform suppliers to reserve production capacity.

3. The role of demand forecast in enterprise strategy.

At the strategic level, demand forecasting can provide decision-making reference for enterprise capacity planning, supplier development and capital planning.

For example, according to the forecast, in the next year or two, one of the company's core products may face the impact of technological progress, and the sales volume will drop significantly. At this time, the company needs to adjust its strategic direction in advance, adjust its future production capacity, integrate or develop suppliers, and plan its future capital demand.

These are the functions of demand forecasting.

Finally, make a summary.

Prediction is the prediction or speculation of possible future events. Demand forecasting refers to the prediction or speculation of customers' demand for our products (or services) in a certain period of time in the future under a specific series of conditions.

Demand forecasting can play a corresponding and considerable role in implementation, management and enterprise strategy.