Trade and Forecasting Glossary

Demand Planning - The process of predicting future customer demand to optimize inventory and production.

Statistical Forecast - Baseline demand prediction using historical data and mathematical models.

Consensus Forecast - Final demand plan combining statistical models with business intelligence and market insights.

Forecast Accuracy - Measure of how close predictions are to actual results, typically expressed as MAPE or bias.

MAPE - Mean Absolute Percentage Error. Key metric measuring forecast accuracy.

Forecast Bias - Tendency to consistently over-forecast (positive bias) or under-forecast (negative bias).

Forecast Horizon - Time period being forecasted (short-term, medium-term, long-term).

Rolling Forecast - Continuously updated forecast that extends the planning horizon as time progresses.

Baseline Volume - Expected sales without promotional activity or unusual events.

Incremental Volume - Additional sales generated by promotions, new distribution, or marketing activities.

Time Series Analysis - Forecasting method using historical patterns, trends, and seasonality.

Causal Models - Forecasting using relationships between demand and external factors (price, weather, promotions).

Holt-Winters - Exponential smoothing method that captures trend and seasonality.

ARIMA - AutoRegressive Integrated Moving Average model for time series forecasting.

Machine Learning Models - AI-based forecasting using algorithms like random forest or neural networks.

Ensemble Forecasting - Combining multiple forecasting methods to improve accuracy.

Judgmental Override - Manual adjustment to statistical forecasts based on business knowledge.

Seasonality Index - Measure of how much demand varies by season compared to average.

Peak Season - Period of highest demand for a product category.

Seasonality Profile - Pattern showing how sales vary throughout the year.

Base-Seasonal-Promotional Decomposition - Breaking down demand into underlying components.

Holiday Lift - Sales increase during holiday periods.

Weather Impact - How temperature, precipitation, etc. affect product demand.

Trade Promotion - Temporary incentives offered to retailers to drive sales.

Promotional Lift - Incremental sales generated by a specific promotion.

Lift Curve - Graph showing sales impact over the duration of a promotion.

Promo Types - Different promotional mechanics (TPR, BOGO, coupon, display, etc.).

Feature Support - Advertisement in retailer's circular or flyer.

Display Support - Special in-store placement during promotion.

Price Elasticity - Sensitivity of demand to price changes, measured as % demand change / % price change.

Cross-Price Elasticity - How price changes of one product affect demand for another.

Trade Calendar - Schedule of all planned promotional activities.

Promo Planning - Process of determining optimal promotion timing, mechanics, and investment.

Event Planning - Coordinating promotional activities across multiple retailers.

Trade Rate - Percentage of sales sold on promotion vs. at regular price.

Promoted Price Point - The discounted retail price during promotion.

Promotion ROI - Return on investment for promotional spending.

Incrementality - True additional sales generated by promotion (excluding baseline and cannibalization).

Forward Buy - Retailers purchasing extra inventory to take advantage of trade deals.

Trade Loading - Inflated shipments due to promotional timing that may not reflect true demand.

New Product Forecasting - Predicting demand for products without sales history.

Analog Method - Using similar existing products to forecast new product performance.

Market Research Integration - Incorporating consumer research data into demand forecasts.

External Data Integration - Using third-party data (weather, economic indicators) in forecasting.

Demand Sensing - Short-term forecasting using real-time signals like POS data.

Collaborative Planning - Joint forecasting process between manufacturer and retailer.

CPFR - Collaborative Planning, Forecasting and Replenishment between trading partners.

Forecast KPIs - Key performance indicators measuring forecasting effectiveness.

Tracking Signal - Measure of forecast bias over time.

Forecast Value Added (FVA) - Improvement in accuracy from forecast adjustments.

Demand Plan Attainment - How well actual results match the demand plan.

Service Level - Percentage of demand met from available inventory.

Stockout Cost - Financial impact of not having product available when demanded.

Excess Inventory Cost - Cost of carrying too much inventory due to over-forecasting.