Demand Planning for Managers: Part 1 - When to Use Statistical Forecasts

[@ntcuong01ct1]

Hello friends, I have 2 questions: 1/ Why should we make a demand plan for the product family instead of each SKU?, what are the benefits?. 2/ How will product family be understood?. Thank you. Note: My company has 200 SKUs belonging to 3 brands.

[@CarlosFlores-ty7dy]

Hi! I can answer #1. Demand plans for product families are WAY much accurate than for individual products that belong to the same family. This is because the data follows the same pattern if you could say it like that. Example: Cocacolas: They have different presentations: 16oz, 20oz, 1 Liter, 2 Liters... Since it's the same flavor, it is technically the same product, but only with a difference in size. You will notice that when making the forecast for these products, they will behave very similar in comparison to other cokes like Fanta that has its own family, and others. At this point, you compare one product family with the other, and get better results than doing this separately, due to the amount of data you have, and the nature of this data. Hope it helped!