Improving forecasting using imperfect advanced demand information

Delivering demand when the longest lead time of a product is larger than the agreed time before delivery requires companies to pre-empt demand in the form of generating forecasts. These estimates of demand can be created using various methods, each formulated for a particular business case - be it reduced holding costs for a smooth demand pattern or otherwise. In some cases, however, demand is hard to predict and there is a consensus of striving to achieve a high service level. In these scenarios, communicating with customers to better understand order quantities is facilitated in the form of advanced demand information. The outcomes of this research suggest that there is an opportunity to create more effective methods at forecasting demand with the prospect of achieving a high service level by combining multiple inputs in the form of advanced demand information and time series forecasting methods. In any case, companies that focus on service level should strive to use advanced demand information to forecast demand.