Role of Demand Management and Forecasting as Risk Diminishing Practices

Conclusion

Demand management and demand forecasting play a major role in risk-diminishing practices. Their application allows for diminishing and eliminating uncertainty that is related to consumer behavior. By possessing information on the forecasted demand volumes in the short and long terms, businesses can make more effective decisions regarding resource distribution and pricing policies because there is no need for urgent or excessive production (Sbrana & Silvestrini, 2013). Finally, these practices make the strategic planning process more effective as the input information used in this process is more precise. Demand management and demand forecasting are the fundamental principles used by businesses to address the risks that they face in their operation. By collecting primary and secondary data using a wide variety of techniques, companies can analyze this information to use it later in their pricing and strategic policies. These two concepts have short and long-term objectives, whereas the latter is more important because it allows the company to set more distant goals and plan ways to achieve them. Overall, the role of demand management and demand planning as risk management practices is to provide companies with approximate data on the future volumes of demand. It is then used to adjust the supply so that the resources are distributed efficiently and there are no wastes or excess or urgent production