twelfth · Glossary · Stock and supply
Demand forecast
A demand forecast is the expected future sales of a product, usually per location and per week, used to plan buys, stock and space.
What it means for retail and category teams
Forecasts start from sales history and adjust for known effects: seasonality, promotions, price changes, new stores, range changes and events. Stockouts in the history need correcting, or the forecast learns from demand that was never served. Forecasts are usually most accurate at an aggregate level, such as a category by month, and least accurate for one product in one store in one week.
Why it matters
Forecasts inform decisions from the seasonal plan to next week's availability. Showing a range of likely outcomes helps the team weigh the cost of being wrong instead of treating one number as certain.
Illustrative example
The business and figures are illustrative, not customer data
A sunscreen launch could exceed the plan in a hot week or fall short in a mild one. The team sees both possibilities before making a seasonal commitment, and adjusts its response as demand becomes clearer.
Related terms
Related on twelfth.ai
- twelfth for merchandise planners
Continuous demand, cover and flow monitoring that shows where the buy plan and the actual trade have come apart.