Demand management

Demand management has a defined set of processes, capabilities and recommended behaviors for companies that produce goods and services.

Theoretical criticisms of demand management are that it relies on a long-run Phillips Curve for which there is no evidence, and that it produces dynamic inconsistency and can therefore be non-credible.

Within manufacturing firms the term is used to describe the activities of demand forecasting, planning, and order fulfillment.

In the environmental context demand management is increasingly taken seriously to reduce the economy's throughput of scarce resources for which market pricing does not reflect true costs.

Demand management in economics focuses on the optimal allocation resources to affect social welfare.

Demand management in its most effective form has a broad definition well beyond just developing a "forecast" based on history supplemented by "market" or customer intelligence, and often left to the supply chain organization to interpret.

The result can lead to reactive decisions, which can have a negative impact of workloads, costs, and customer satisfaction.

Predictive forecasts use simulation of potential future outcomes and their probabilities rather than history to form the basis for long range (5-10+ years) demand plans.

Baseline forecasts are typically developed by demand planners and analysts, who may be regional or centrally located.

Thus, proper forecast and sizing of demand is required in order to deliver a stable and effective technology environment.

[citation needed] Romano, Grimaldi, and Colasuonno consider demand management as a harvesting activity, governed by a strategy that gives portfolios direction and a selection model intended to select the best beneficial set of activities aligned with strategic objectives.