The business plan is the volume, cost and profit plan for, typically, the upcoming year. This is also referred to as the annual budgeting process.

Business planning is critical for every company, while long-term forecasting is indispensable for companies with longer product development cycles. The long-term plan provides the inputs for capacity planning and other long-term expansion initiatives.

It is common knowledge that longer-term forecasts are more erroneous than short-term forecasts. There are more dynamic variables and error processes at play in determining the conditions expected to prevail in the future. So it is also necessary to subject your forecast to a sensitivity analysis to understand the robustness of the forecast if the underlying economic and business environment changes. DemandPlanning.Net has developed a unique methodology to develop long-term forecasting and analyzing forecast sensitivity.

Often the annual Marketing Plan is the driver for the demand information in the annual budget. The Marketing Plan is developed with a volume forecast for the year along with the spending levels necessary to create and sustain the expected demand for the products. Marketing-mix modeling is a key component of developing the Marketing Plan.