Role of Demand Management as a Risk-Diminishing Practice

Demand management and demand forecasting mean nothing else but the control and administration of demand flow. In its operation, a company faces a wide variety of risks of different natures. However, since the purpose of every company is to generate revenues from providing services and products to consumers, demand is highly significant for every producer. It is a fact that the operational strategies of many companies cannot be implemented in real-time as new orders are made because goods or services need to be made in advance. While a business can measure the volume of demand at the current moment or over the recent time, it also needs to estimate what it will be in the future, in the short and long term. There is no doubt that a business can't make a completely correct and precise statement about the future volume of demand since there will always be some degree of error and estimation. However, the principles of demand management and demand forecasting provide companies with tools on how to make such estimates as precise as possible and diminish the impact of errors. Through the use of special techniques, businesses are able to collect data, analyze it, and obtain results that can later be used to forecast the future volume of demand to include it in the operational strategy. Therefore, demand management and demand forecasting allow for avoiding additional operation costs, such as excessive or urgent manufacturing or delivery, and there are a number of techniques that businesses use to stimulate demand and adjust it to the previously forecasted levels