An Introduction to AI Demand Forecasting

Home > Blogs > An Introduction to AI Demand Forecasting
An Introduction to AI Demand Forecasting

Jul 06, 2023 | 5 min read

One of the major challenges for business leaders today is demand volatility in relation to demand planning. While data availability continues to grow, customer purchase patterns are becoming increasingly difficult to predict, which is why it is more and more challenging to lay out an accurate demand planning strategy. Too many components affect demand, ranging from weather fluctuations to posts by social media influencers, causing customers to change their buying habits frequently. Things affecting customers’ minds will happen unexpectedly. Traditional forecasting techniques are only as accurate as the resources, models, and data have to interpret them. So how do we tackle these challenges? The Way Out

AI Demand Forecasting

A solution to demand uncertainty is demand forecasting software using artificial intelligence. Traditionally, demand forecasting is a type of predictive analytics where the method of evaluating customer demand is analyzed using historical data. Using AI-powered forecasting, businesses can leverage machine learning algorithms to predict shifts in customer demand as precisely as possible. These algorithms can automatically address pattern changes, identify complex connections in large datasets, and capture signals for demand fluctuations.

Usually, businesses use this type of AI to avoid discrepancies caused by mismanagement of demand and supply throughout the operational process. Exercising these practices can offer the opportunity to significantly reduce supply chain costs and make improvements in financial planning, workforce development, profitability, and risk assessment.

What is Demand Forecasting?

Demand forecasting is an analysis of an organization’s processes that accurately predicts how much future demand there will be for a product or service.

Instead of businesses trying to evaluate how busy they will be over a particular period, demand forecasting leverages historical data and current trends to predict an accurate picture of the future automatically.

If a business uses AI, it can track various parts of the supply chain simultaneously, from how many products an organization is selling to when inventory stock will run out based on the SKU numbers. It can also keep track of which products are not selling very well, leading to excessive storage costs, and how demand and sales can fluctuate depending on the season or a specific time of year.

Benefits of Demand Forecasting

When it is time for any business to sit down and evaluate its demand forecasting, it can lean on its company’s historical data to calculate accurate future demand. Connecting your business with AI demand forecasting can help you:

  • Satisfy Customer Experience

    When you can figure out exactly what your customer needs, you can focus on better product development, faster delivery, and zero wastage. Any business that observes its supply chain and the market can deliver a fully satisfied customer experience to its existing and potential customers.

  • Optimize Discounts and Promotion

    Products that are gathering dust in your inventory cost you serious money. With its accurate reporting, AI-powered forecasting enables you to pinpoint slow-moving products and eventually helps you start product and service promotions and discounts to sell them faster.

  • Better Workforce Management

    Just like your products and services, the employment market also faces a number of ups and downs. The same goes for your workforce requirements throughout the year. Demand forecasting enables you to observe low or high employee requirements during off or peak seasons and allows you to hire seasonal resources accordingly.

  • Overall Improvement

    Artificial intelligence is like a sponge. It utilizes machine learning algorithms to constantly improve your business. With this smart solution by your side, you can focus on your overall product improvement and keep your customers happy.

  • Boost Business Efficiency

    AI demand forecasting process helps teams to emphasize on strategic issues instead of handling unforeseen stock fluctuation or dealing with supply chain discrepancies as they come. This solution makes you more proactive than reactive, resolving any business-related issue before it happens.

How AI Demand Forecasting Can Change the Entire Supply Chain Ecosystem

Imagine, whenever you need to look into your business’s future, you look into a crystal ball for all your future needs! Sounds imaginary, right?

Not anymore.

AI-powered forecasting empowers you to get precision-based reporting based on your historical data and delivers you accurate forecasting. Artificial intelligence backed by machine learning algorithms provides automated processing and performs repetitive tasks more accurately for you. The supply chain industry is a persistently changing space, and to utilize that extra edge over your competitors in this business, you need to connect your business with an intelligent AI-driven demand forecasting solution.

Fail-Proof Your Supply Chain with Avercast

Avercast is an industry-leading supply chain management solution provider. With our demand forecasting and inventory planning software, we help our client to leverage their historical data to access precision-based future demand. Powered by 250+ algorithms, our solution delivers real-time visibility into your inventory management. To learn more about our solutions, talk to our experts or book a free demo.