What is the term for the process of using past data to predict future demand?

The term that accurately describes the process of using past data to predict future demand is "forecast." In procurement and supply chain management, forecasting is a critical function that involves analyzing historical data trends, seasonality, and market conditions to estimate future demand for goods and services. A good forecast helps organizations plan their purchasing, production, and inventory levels effectively, reducing the risk of overstocks or stockouts.

Forecasting relies on statistical techniques and models to interpret the available data and establish trends, thereby allowing decision-makers to anticipate changes in demand and adjust their strategies accordingly. This capability is especially important in dynamic markets where demand can fluctuate due to various factors such as consumer preferences, economic changes, and emerging trends.

While the terms "outlook," "projection," and "estimation" may seem similar, they encompass different nuances in this context. "Outlook" often refers to a general perspective on what is expected in the future rather than the specific statistical analysis that forecasting entails. "Projection" may denote a specific forward-looking calculation but does not emphasize the reliance on historical data to the extent that forecasting does. "Estimation" generally involves approximating values and might not require any historical data at all. Thus, forecasting best captures the structured approach of utilizing past data