Demand forecasting: how artificial intelligence can help

A company is a dynamic entity that must be constantly changing and evolving in order to adapt to the market and become more productive and competitive. Demand forecasting is a fundamental task for any business, as it allows it to be at an advantage in the future.

The advance of different technologies such as big data and artificial intelligence has allowed

companies to use them to achieve much more accurate and real demand predictions, placing the companies that bet on it in a privileged situation in the market.

What is demand forecasting?

Demand forecasting is a process that aims to accurately estimate the volume of sales that a

product or service will have in the future over a given period of time.

Predictive demand models are really important for any company, as they have a direct impact on decision making in many key aspects of the business, such as the purchases to be made or the conversion strategies to be followed, among others.

Why it is so important and its benefits

Knowing the demand in a future and determined period will allow the company to make better

decisions and prepare to respond to it in an optimal way. The main benefits of accurate demand forecasting are:

Improve decision making. One of the most important advantages of a good demand

forecast is the improvement in business decision making. Knowing what the company's

demand will be is essential to be able to make better purchases, hire the necessary

personnel, use the appropriate channels and means of communication...

Fulfill customer orders. An accurate demand forecast will allow the company to guarantee

customers the availability of its products at all times, thus avoiding the dreaded stock-outs.

How artificial intelligence helps in demand forecasting

Artificial intelligence in demand forecasting has been a true revolution in the business world. AI provides technological solutions based on intelligent data analytics to extract valuable demand information from the vast amount of data that companies handle.

Artificial intelligence can work with both structured and unstructured data. Nowadays, companies use a large number of communication channels through which they generate high volumes of information.

Most of this data is unstructured and cannot be optimally analyzed and managed by traditional methods (such as the use of relational databases or basic data analysis techniques).

Artificial intelligence predictive models also work with this unstructured data, providing a global and complete view of consumer behavior and making the predictions obtained objective (eliminating the subjective component of data prediction).

So many factors are involved in calculating demand forecasting that it is not feasible for one

person to consider them all at once. This situation is ideal for using artificial intelligence and

machine learning; an infinite number of factors can be easily processed in order to obtain more realistic and accurate forecasting results.

Some of the most interesting advantages of artificial intelligence applied to demand forecasting for companies are:

Self-learning. Artificial intelligence and machine learning facilitate continuous learning

without the need for human participation in the process. In other words, predictions will be

increasingly accurate and certain thanks to the automatic learning of the AI algorithms used to

make them.

Adjustment of the predictive method. There are many methods to estimate future demand

(qualitative, quantitative...). Artificial intelligence is able to select the best method for each

case, thus achieving more reliable results depending on the product, market, type of


Optimize logistics and transportation. Thanks to artificial intelligence applied to demand

predictions, the company will be able to establish a much more accurate stock balance point.

This helps to optimize logistics and transportation processes and makes the company's

operation much more agile and efficient.

Boosts marketing decisions. With more reliable data on future product demand, the

company can adjust its digital marketing strategies to make them more effective (such as

loyalty strategies or brand image enhancement, among others).

Forecasting future demand should be a regular practice in your company so that you can be more competitive in today's globalized and digitized market. Implementing artificial intelligence tools in your company is the key to being able to accurately and successfully predict future demand, and thus adapt your purchases and strategies to obtain the best results.

At Aygloo we offer you AI solutions so you can extract value from your data and make the best decisions. We help you to predict demand and make your business ready to succeed thanks to reliable and accurate data.