Demand Forecasting

Overview

Demand forecasting uses historical sales data, seasonal patterns, and lead times to predict how much inventory you'll need and when to reorder. Chronic stockouts or overstock situations are usually a sign that reorder points are based on intuition rather than data. Purpose-built inventory planning tools handle this for most merchants — custom forecasting code is only necessary for unique operational requirements.

When to Use This Skill

• When chronic stockouts or overstock situations indicate that current reorder points are set incorrectly
• When building automated replenishment recommendations to reduce manual inventory review
• When planning inventory for seasonal peaks (Black Friday, back-to-school, holiday season)
• When you have 12+ months of sales history and want to extract meaningful demand patterns
• When integrating with supplier lead times and purchase order workflows for end-to-end replenishment

Core Instructions

Step 1: Determine your platform and choose the right forecasting tool