This chapter describes demand forecasting which is a critical function that influences companies worldwide across all industries, including heavy manufacturing, consumer packaged goods, retail, pharmaceutical, automotive, electronics, telecommunications, financial, and others. Not only is demand forecasting critical to driving out inefficiencies in the supply chain, but it also affects all facets of the company on an enterprise‐wide basis. There are several key steps a company can take to begin the transition to a demand‐driven forecasting process. Even with the best intentions, companies still are having problems generating accurate demand forecasts. It continues to be one of the most sought‐after objectives for improving supply chain management. Now that many of the downstream planning inefficiencies have been resolved, there is a renewed focus on improving the accuracy of demand forecasts.