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Demand management is a planning methodology used to forecast, plan for and manage the demand for products and services. This can be at macro-levels as in economics and at micro-levels within individual organizations.
Transportation demand management or travel demand management (TDM) is the application of strategies and policies to increase the efficiency of transportation systems, that reduce travel demand, or to redistribute this demand in space or in time.
Customer demand planning aims at matching customer supply planning logic and implies CPFR type collaboration. Aspects of demand management include customer experience, demand creation, inventory and pricing optimization, channel management, sourcing, transportation optimization and advanced practices in technology.
The inputs could be: demand plans, sales/demand forecasts, demand impacts, marketing actions and sales actions, procurement and supply plan, supplier lead time, constraints from the supplier and other information, supply capacity, production and capacity plan, Inventory, work-force level, operational constraints, production lead time ...
This is an important tool in optimizing business profitability through efficient supply chain management. Demand forecasting methods are divided into two major categories, qualitative and quantitative methods: Qualitative methods are based on expert opinion and information gathered from the field.
Plan – Processes that balance aggregate demand and supply to develop a course of action that best meets sourcing, production, and delivery requirements. Source – Processes that procure goods and services to meet planned or actual demand. Make – Processes that transform product to a finished state to meet planned or actual demand.
Governments of many countries mandated performance of various programs for demand management. An early example is the National Energy Conservation Policy Act of 1978 in the U.S., preceded by similar actions in California and Wisconsin. Demand-side management was introduced publicly by Electric Power Research Institute (EPRI) in the 1980s. [8]
Supply chain management integrates supply and demand management within and across companies. More recently, the loosely coupled, self-organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise. [citation needed]