What is a demand forecast in logistics and how is it used?

• A. An estimate of future consumption to guide procurement, stocking, and distribution plans to meet expected needs.
• B. A report of past purchases only.
• C. A list of current stock levels.
• D. A schedule for employee shifts.

Answer: (A)

Demand forecast is a forward-looking estimate of how much customers will need in the future. In logistics, this projection is used to shape procurement, stocking, and distribution plans so the right quantities are available at the right times to meet expected demand. By predicting future consumption, planners determine how much to order, when to place orders, how much safety stock to hold, and how to allocate inventory across warehouses and routes, all while considering lead times and service levels. This approach helps prevent stockouts and reduce excess inventory, aligning supply with anticipated needs. The other options describe past purchases, current stock levels, or labor scheduling—things that are not forecasts and do not directly drive procurement and distribution planning.