Which is a primary objective of Demand Forecasting?

A primary objective of demand forecasting is ensuring adequate inventory levels. This is essential because accurate demand forecasts help organizations predict future demand for their products or services. By understanding expected sales volumes, companies can maintain the right amount of stock to meet customer needs without overstocking or understocking.

When inventory levels are adequately maintained based on reliable forecasts, it minimizes the risk of stockouts, which can lead to missed sales opportunities and customer dissatisfaction. Additionally, it helps reduce excess inventory that can incur holding costs and potentially lead to obsolescence. Thus, ensuring adequate inventory levels is directly linked to the efficiency of supply chain operations and customer service levels, making it a fundamental goal of demand forecasting.