Machine learning forecasting: Why, what & how

With customer expectations and preferences changing faster than ever, a deep understanding of the customer demand is essential to making the right decisions about marketing spend, sourcing, inventory, production, transportation, staffing, and more. Critical business measures like turnover, capital expenditure, risk evaluation, profit margins, cash flow, and capacity planning are all reliant on accurate demand forecasting, which ultimately can help businesses to estimate the total sales and revenue for a defined future. Typically, demand forecasting includes activities such as supply planning, product manufacturing planning (e.g., sourcing, R&D), and financial planning. The critical aspect of these planning activities is to understand product demands from customers and how to fulfil those demands in the most timely and efficient way. By capturing the variability of future demand through forecasting, businesses can predict customer behaviors more accurately and meet their demands with a higher level of confidence and significantly reduced lead times from order to delivery.