Supply chain decision

As explained in Demand Forecasting Best Practices

A supply chain decision is a decision about the planning or execution of supply-chain activities such as ordering, production, or movement of goods.

A supply chain decision determines what demand information is useful. Forecasts should match the activity being planned, its material, geographical, and temporal granularity, and its time horizon. section 5.3.1 section 7.1

Match forecast detail to the decision’s operating horizon:

• Logistics managers decide which shops or warehouses receive goods over the next few days, requiring granular forecasts by store, product, and day. section 7.1
• Plant managers plan production over the next few weeks, while marketing strategists assess product renewal over six to nine months. section 7.1
• Finance managers plan cash flow over following quarters, making aggregated revenue forecasts more appropriate. section 7.1

Shipping demand from a plant

Suppose a plant must decide which products to ship to regional warehouses. Forecast demand for each warehouse’s geographical footprint rather than its historical shipments. If Warehouse A is out of stock, Warehouse B may fulfill A’s orders, causing shipments to misrepresent the demand each warehouse should serve. section 5.3.1

Figure 7.1 Supply chain roles and forecasting granularities and horizons

Use the figure to compare supply chain roles with the forecasting granularities and horizons their decisions require. section 7.1

How Demand Forecasting Best Practices covers it

How deep it goes

Connects decisions to forecast granularity and horizon, but stops short of specifying optimization methods or decision rules.

Examples

Uses warehouse allocation, stockout-driven rerouting, shop replenishment, production planning, product renewal, and quarterly cash-flow planning.

What it assumes

Assumes awareness of supply chain roles and demand forecasts while teaching how decisions determine forecast detail and timing.

What you can do after

Evaluate which demand aggregation level and horizon will make a forecast actionable for a specific supply chain decision.

How it connects

Connects demand forecasting with forecasting granularity, forecasting horizon, inventory deployment, production planning, and cash-flow planning.

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Related concepts

• demand forecastused by · A demand forecast is an estimate or prediction of the quantity of a product, service, or resource that will be needed during a specified future period.
• forecastinguses · Forecasting is the process of predicting future values or outcomes from information currently available, often including historical observations.

This explainer was generated by Manning's knowledge graph from the text of Demand Forecasting Best Practices. The section links point to the parts of the book it draws on.