Demand Management How Demand Management
The ability of any organization to accurately predict individualized product demand and aggregate forecasts so that production and logistics planning can profitably fulfill sales is the essence of best practices in demand management. The intent of this analysis is to evaluate the role of logistics planning in creating a more demand-driven enterprise. There are a multimode of factors that influence demand management accuracy and performance, also influencing production and logistics planning and execution. One of the most difficult to anticipate and accurately predict is consumer demand for new products (Croxton, Lambert, Garcia-Dastugue, Rogers, 2002). Another is how pricing and product strategy decisions will influence demand for products at the mid-point of their lifecycles, especially with industrially-oriented products that are typically price inelastic (Hilletofth, 2011). Third, industries that have very high levels of seasonality and often see their entire product lines change rapidly as does the fashion industry does for example also make demand management particularly difficult (Jacobs, 2006). All of these factors together however have a major impact on the accuracy and performance of logistics systems, as they are often the most dependent on accuracy of forecasts and assessment of market conditions (Moodie, 1999). Logistics system in general amplify just how accurate and based on reality sales estimates and forecasts are (Godsell, Christopher, 2006).