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Demand management is the supply chain managementprocess that balances the customers’ requirements with the capabilities of the supply chain. With the proper process in place, management can match supply with demand proactively and execute the plan with minimal disruptions.

The method isn't limited to forecasting. It includes synchronizing supply and demand, increasing flexibility, and reducing variability.

Demand management is the term that influences sales. If the merchandise isn’t available for customers to get because it’s out of stock, businesses lose out on revenue, and over time, they may lose the customer to a competitor.

On the opposite hand, sitting on a slew of unused inventory incurs both space and production costs unnecessarily. With demand planning, businesses leaders can stay before market shifts and make more proactive decisions, while being alert to their customers’ needs.