Which technique is commonly used for balancing supply and demand?

Demand forecasting to align production schedules is a widely utilized technique for balancing supply and demand. This approach involves analyzing historical sales data and market trends to predict future customer demand accurately. By understanding expected demand patterns, organizations can adjust their production planning accordingly, ensuring that they produce enough goods to meet anticipated sales without overproducing, which could lead to excess inventory.

Effective demand forecasting allows businesses to make informed decisions regarding resource allocation, production schedules, and inventory management. This not only helps in minimizing costs associated with holding excess stock but also enables companies to respond swiftly to changes in customer preferences or market dynamics. In sectors where demand can fluctuate significantly, such as retail or manufacturing, accurate demand forecasting is crucial for maintaining service levels while optimizing supply chain efficiency.