What best describes demand planning?

• A. The process of budgeting for marketing campaigns.
• B. The process of scheduling production based solely on past sales.
• C. The process of combining statistical forecasting techniques and judgement to construct demand estimates for products or services.
• D. The process of determining supplier contracts.

Answer: (C)

Demand planning blends statistical forecasting with managerial judgment to construct demand estimates for products or services. It uses historical data, seasonality, and trends, then adds insights about upcoming promotions, market shifts, and new product introductions. The result is a forecast that guides how much to produce, how much inventory to hold, and how to plan capacity, so supply aligns with expected demand. The other activities described—budgeting for marketing campaigns, scheduling production based only on past sales, and determining supplier contracts—serve different purposes (funding, purely reactive production, and sourcing) and do not describe the forecasting process that links future demand estimates to supply decisions.