What is the formal definition of Demand Planning in supply chain management?

• A. A process for hiring staff.
• B. A method to audit inventory quality.
• C. A method to reduce manufacturing lead times.
• D. Supply chain management process of forecasting, or predicting, the demand for products to ensure they can meet consumer demand.

Answer: (D)

Demand planning is forecasting future customer demand and preparing the supply chain to meet it. It’s the formal process in supply chain management that involves predicting how much of each product will be needed and coordinating inventory, production, and capacity so that products are available when customers want them. This uses historical data, market trends, seasonality, promotions, and input from sales and marketing to create a realistic forecast and an actionable plan. By aligning procurement, manufacturing, and distribution with expected demand, it helps avoid stockouts and minimizes excess inventory. The other options describe activities outside demand planning: hiring staff (HR), auditing inventory quality (inventory control/quality assurance), and reducing manufacturing lead times (a separate efficiency goal rather than the definition of demand planning).