Accurate inventory forecasting is essential for every supply chain business, especially when customer demand changes rapidly. Mathematical and statistical data analysis is central to this process. To put it in technical terms, inventory forecasting or demand planning refers to the practice of using data on past events and trends to predict inventory amounts needed to meet future demand. When forecasting is accurate, businesses are prepared with enough product to fulfill orders and inventory spending is not too much or too little. Effective inventory forecasting can make all the difference in profitability. 

For example, accurate inventory forecasting can provide strategic insights that a company can use to align the levels of inventory with their business goals.