Forecasting

Forecasting

• A. Forecast
• B. Forecasting
• C. Demand
• D. Inventory

Answer: (B)

Forecasting is the process of predicting future demand and other planning variables to support decision making in supply chain management. The reason this term fits best is that the question is pointing to the activity itself—the ongoing practice of estimating what will be needed in the future to plan production, purchasing, and service levels. A forecast, by contrast, is the projection itself and is typically used as a noun or a single predicted value rather than the ongoing process. Demand is the quantity customers will buy, which is what you try to estimate, but it’s the target of forecasting, not the act. Inventory is the stock you manage after forecasting and planning. In practice, forecasting guides how much to produce, order, or stock to meet expected demand while balancing costs and service quality.