Whereas AI fashions have taken the highlight, conventional statistical fashions stay extremely beneficial instruments for demand forecasting

Good day Medium readers!

Right now, we’ll dive into forecasting strategies utilized to demand planning, a area that I’m extremely invested in as a result of my provide chain background and fervour for knowledge science. Not too long ago, I’ve been studying up on this matter, revisiting books and articles on demand forecasting to offer you some recent insights.

To kick issues off, let me share a thought-provoking quote by British statistician George E. P. Field:

“All fashions are fallacious, however some are helpful.”

As you mirror on this quote, you may surprise: why even hassle forecasting the long run if no mannequin can ever be solely correct? Consider it like climate forecasting: it helps us plan forward. Ought to I deliver an umbrella tomorrow? Ought to I placed on sunscreen? Ought to I take shelter from a hurricane? Forecasts, whereas imperfect, information us in making higher choices.

In demand planning, it’s no totally different. Demand planners and different firm stakeholders use forecasts to anticipate future wants and regulate…