Which of the following is a subfunction of Operations Management?

• A. Planning Systems
• B. Forecasting and Demand Planning
• C. Inventory Management
• D. Process Management

Answer: (B)

Forecasting and demand planning is a subfunction of operations management because it creates the bridge between market demand and the actual operating plan. By predicting how much customers will want and when, this function determines how much to produce, what levels of capacity are needed, and how much inventory to hold. These forecasts guide scheduling, capacity decisions, and replenishment policies, helping the operation align resources with anticipated demand and avoid both stockouts and excessive inventory.

Other options describe important activities within operations, but they don’t center on generating and translating demand into the plan in the same direct way. Planning systems refer to the tools and frameworks used to plan, inventory management focuses on controlling stock once plans are in place, and process management concentrates on designing and improving how work is done. Forecasting and demand planning uniquely encapsulate forecasting the future and shaping the operational plan around that forecast, making it the best fit as a subfunction.