Demand forecasting

If demand data is available for equally spaced time intervals, an attempt can be made to forecast its future values. Forecasting demand data is useful for planning and management of inventory; accurate forecasting ultimately leads to cost savings. A sequence of data points taken at successive and equally-spaced time intervals forms a time series, which is generally plotted with time along the X-axis and demand along the Y-axis.

The following graph represents a sample weekly time series, with demand data available for each week.