> For the complete documentation index, see [llms.txt](https://academy.pakk.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://academy.pakk.io/school-of-erp/purchasing-and-demand-planning/demand-planning.md).

# Demand Planning

**Understanding Demand Planning**

Demand planning is the process of forecasting the quantity of products or materials your business will need over a specific period. It helps ensure that you have the right products in stock at the right time, avoiding stockouts or overstock situations. Demand planning takes into account sales history, market trends, and seasonal demand to predict future needs.

**Key Concepts:**

* **Reorder Points:** The inventory level that triggers a reorder to ensure stock doesn’t run out.
* **Lead Times:** The time it takes from placing an order with a supplier to receiving the goods.
* **Safety Stock:** Extra inventory kept on hand to prevent stockouts due to unforeseen demand spikes.

<figure><img src="/files/KXuYgmPOGnjwTGVkeB4N" alt=""><figcaption><p>On demand planning in Pakk</p></figcaption></figure>


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