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Logistics & Supply Chain vocabulary · Demand Planning

Demand planning

Meaning in logistics & supply chain, with examples

nounCommon term

In logistics & supply chain, demand planning means: The process of predicting future demand and agreeing on one demand plan that the company then uses to plan purchasing, production and stock.

In Turkish: talep planlaması

How it is used

Broader than forecasting: a demand planner starts with a statistical forecast and adjusts it with input from sales and marketing, such as promotions, new products and large customer orders. The final number feeds the S&OP process.

Example sentences

  1. Demand planning needs to know about the promotion at least eight weeks before it starts.

  2. She works in demand planning and meets the sales team every Monday to review the numbers.

Common collocations

  • demand planning process
  • demand planner
  • demand planning software
  • consensus demand plan
  • demand forecastingThe process of estimating how much of a product customers will buy in a future period, using sales history, market information and planned promotions.
  • S&OPShort for sales and operations planning: a regular, usually monthly, process in which sales, operations, supply chain and finance agree one plan that balances demand and supply.
  • MRPShort for material requirements planning: a system that uses the production plan, bills of materials and stock levels to calculate which materials to order or make, and when.
  • safety stockExtra stock kept on top of expected demand to protect against sudden increases in demand or late deliveries from suppliers.
  • bullwhip effectThe way small changes in consumer demand turn into larger and larger swings in orders and stock as they move up the supply chain to wholesalers, manufacturers and suppliers.

More terms: Demand Planning

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