What Is Short Term Forecast of Demand
What is short term forecast of demand
Short term means 1day to 3 months forecasting. Managers are interested in forecasts for disaggregated demand ,such as for specific product and for specific geography. Short term has little time to react to errors in demand forecast, therefor, the forecasts need to be as accurate as possible. Moreover, the demand forecast forms the basis of all supply chain, all push processes in the supply chain are performed in anticipation of customer demand ,whereas all pull processes are performed in response to customer demand.
For example, for push processes, the manager must plan the level of activity, be their production, transportation, or any other planned activity. A manager must plan the level of available capacity and inventory but not the actual amount to be executed.
How the organization improving short term forecast
Because the forecasting is more and more important to every company, each of organization consider that how to improve it in accurately. There are tow ways that company can improve forecast in short term: Change the forecasting method and Change operations or operating policies.
Change the forecasting method means managers can collect more or different data or
analyze the informations differently. For example can involve more people to think about the solutions, established new forecasting software as well as spend more time manually reviewing, focus groups and so on. Change operations or operating policies is focus on Introduce early warning mechanisms to improve safety level, take some advantages of the law of large numbers, reduce information delays as well as can
reduce demand volatility to achieve organization goals.
Inventory management is a system, an organization is used to monitor the products and services of the inflow and outflow（Sherrie. S. and Demand .M. ，2014). Inventory management is very important for every company, which will determine the relationship between demand and supply, even for a small retailers, inventory management is also essential.there are some effective ways to manage inventory.