The Forecast

Demand forecasting is never about predicting the future with precision — it's about making commitments under uncertainty where the cost of being wrong is asymmetric. A stockout in peak season is not the mirror image of excess inventory: one forfeits revenue and disappoints customers at the moment they're most likely to switch brands; the other erodes margin while still generating cash. Before you set a forecast, the most important question isn't "what will demand be?" — it's "which error is more expensive?" That asymmetry should drive the number you commit to, not the midpoint of your range.