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How do you forecast demand when historical sales are distorted by shortages or supply restrictions?

Answer:

This is one of the most challenging aspects of pharmaceutical Supply Chain planning. Historical sales data often underestimates true market demand because periods of supplier shortages, product allocations or sales restrictions suppress actual sales. Using this data without adjustment inevitably leads to under-forecasting, insufficient replenishment recommendations and recurring stockouts. The correct approach is to identify constrained periods, exclude them from the forecasting model and reconstruct unconstrained demand instead. Probabilistic forecasting goes one step further by explicitly modelling the uncertainty surrounding each forecast, allowing safety stock to be sized according to actual risk rather than fixed inventory rules.

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