NAME: REGINE V.

NANIT
SECTION: MBA SECTION 7/ SID
SUBJECT: LOGISTICS, OPERATIONS & SUPPLY CHAIN MANAGEMENT
PROFESSOR: RUBEN A. SANCHEZ

FORMATIVE ASSESSMENT 1
Question 1 OF 2
Why is demand forecasting important for effective supply management?

Answer:
Effective supply management is crucial for organizations to meet customer demand, minimize costs, and
maintain a competitive edge in the market. Demand Forecasting plays a pivot role in achieving these
objectives. By accurately predicting future demand for products and services, organizations can optimize
their supply chain operations, enhance resource allocation and improve overall customer satisfaction.

Demand forecasting is essential to organization's supply management as it resulted to optimal inventory

management. Accurate demand forecasts help avoid excess inventory or stockouts, it reduced costs and
thereby preventing customer dissatisfaction.

It also provides valuable insights into the expected demand for various resources such as labor,
equipment’s, transportation etc. Having a define process of demand forecasting, organizations can
allocate resources optimally and will lead to efficient resource utilization, minimized costs and more
improved operational efficiency.

In today's dynamic business environment, demand forecasting is necessary tool for organizations seeking
to stay competitive and achieve supply chain excellence. By leveraging demand forecasting effectively,
organizations can enhance their overall supply chain performance, improve customer satisfaction, and
gain a competitive advantage in the market.