Forecasting is an essential function of supply chain management and accurate forecasting can help managers prepare to meet market demands while keeping carrying costs as minimal as possible. To accurately forecast, four variables must be taken into consideration: supply, demand, product characteristics, and competitive environment $($Hugos$,2018).$ When forecasting supply, decision makers must consider the number of suppliers who can produce the product and lead time to get the product delivered. Does the inventory on hand meet the current needs and$/$ or will an order to increase supply arrive in a timely enough manner to ensure there is always a supply without over burdening the inventory? Demand consists of the overall necessity for a certain product or service and the market condition driving the need. Is there a season or event driving demand or is the market steady and predictable? Product characteristics consists of all of the features of a product that drives consumer demand. What features of products draw a consumer to that product? Are there comparable replacements for the product? And finally, decision makers must consider the competitive environment and how the organizations fit into the current market. Does the organization have a monopoly on the market or are there plentiful substitutes for consumers to choose from $($Hugos$,2018).$

I deal with all four variables on a regular basis in my line of work. When there are specialty products that are required, and less suppliers who can produce them, there is more uncertainty and risk associated with procuring the product. Numerous organizations have begun using cross$-$sectional aggregated approaches to forecasting to help manage demand and reduce uncertainty by $$pooling$$ the risk $($Babai et al$.,2022.).$ I work in an industry with numerous products with special characteristic and limited suppliers who can produce the products. This also increases risk to the organization and production line. Being able to accurately forecast the need and knowing the most up to date lead times is necessary for reducing risk. The overall goal for my organization is to reduce risk while keeping carrying costs low. My organization also utilizes a just in time inventory system which can create uncertainty when there are unpredictable changes in the supply chain. Specialty commodities also increase risks if there are not replacements readily available.