Demand Forecasting in Dynamics 365 Business Central: Planning Ahead Without Overcomplicating Things

Let’s start with an honest question.

How often do you make inventory or purchasing decisions based on a mix of experience, gut feel, and “what happened last year”?

If you’re nodding, you’re in good company. Most professionals I talk to aren’t ignoring data—they’re just short on time. And when you’re juggling operations, customers, and leadership expectations, demand forecasting can feel like one more thing that should be important but never quite makes it to the top of the list.

That’s where demand forecasting in Dynamics 365 Business Central quietly earns its place. It’s not flashy. It doesn’t promise perfect predictions. But it does give you a structured way to plan demand using information you already have.

And sometimes, that’s exactly what you need.

What Demand Forecasting Means in Business Central

In Business Central, demand forecasting is very literal.

You’re not asking the system to “figure it out for you.” Instead, you’re recording expected demand for items over time so that planning can take it into account.

A demand forecast answers questions like:

• How much do we expect to sell or use?
• When do we expect that demand to occur?
• Should planning consider this demand before actual orders exist?

It’s a way to tell the system, “This demand is coming, even if it hasn’t shown up as a sales order yet.”

Simple idea. Big impact.

Why Forecasting Still Matters (Even If You’re Experienced)

If you’ve been in operations or supply chain for a while, it’s tempting to think forecasting is unnecessary. After all, you know your business.

But here’s the thing: systems plan based on what they can see.

Without a forecast, Business Central only reacts to actual demand—sales orders, production orders, and transfers. That works fine until you need to plan ahead of confirmed orders.

Seasonal spikes.
Large customers who order late.
Long supplier lead times.
Promotions you already know are coming.

Forecasting gives your planning engine a heads-up.

Have you ever wished the system could “see what you already know”? This is how you do that.

How Demand Forecasts Work in Business Central

Business Central uses demand forecasts as an input to planning, not as an automated decision-maker.

You create a forecast by:

• Naming the forecast
• Choosing whether it applies to sales items, components, or both
• Entering quantities by item and date
• Defining the time period (day, week, month, etc.)

That forecast then becomes available to planning processes like MRP and MPS.

Importantly, forecasts don’t replace real demand. When actual sales orders exist, Business Central nets forecasted demand against them so you’re not double-counting.

This balance is one of the strengths of the system.

Forecasting Isn’t Automatic—and That’s Intentional

One thing that surprises people is that Business Central doesn’t automatically generate forecasts based on historical data.

At first, that can feel like a limitation.

But in practice, it’s often a strength.

Why? Because forecasting always involves assumptions. And Business Central assumes that you want control over those assumptions.

You decide:

• What items should be forecasted
• Over what time horizon
• At what level of detail
• With what business context in mind

This keeps forecasting grounded in reality rather than abstract math.

Forecasting by Time Period (Keeping It Practical)

When creating a demand forecast, you choose how demand is grouped over time—daily, weekly, monthly, quarterly, or even by accounting period.

This choice matters more than people realize.

Forecasting monthly demand for fast-moving items might hide important spikes.
Forecasting daily demand for slow-moving items might create noise.

There’s no universal right answer. The goal is to match the forecast period to how decisions are actually made in your business.

Ask yourself: How far ahead do we realistically plan—and at what level of detail?

Forecasting by Location (When It Really Matters)

Business Central also allows you to use forecasts by location, if needed.

This is especially useful if:

• You stock items in multiple warehouses
• Demand varies significantly by region
• Replenishment decisions are location-specific

When enabled, planning respects forecasted demand at each location instead of lumping everything together.

It’s one of those settings that seems small—until it isn’t.

From Forecast to Action: Planning Worksheets

A demand forecast on its own doesn’t do anything.

The real value appears when you run planning worksheets.

When you run planning:

• Forecasted demand is considered alongside actual demand
• Current inventory is netted out
• Lead times and reorder parameters are applied
• Supply suggestions are generated

You still review the results. You still approve the orders. But now those decisions are backed by a clearer picture of what’s coming.

This is where forecasting shifts from theory to execution.

A Real-World Example (You’ve Probably Lived This)

Let’s say you distribute equipment that sells steadily—but spikes every spring.

Customers don’t place orders early.
Suppliers have long lead times.
And every year, things feel tight.

Without a forecast, planning reacts too late.

With a forecast, you can:

• Enter expected spring demand ahead of time
• Run planning months earlier
• Stage inventory more deliberately
• Reduce last-minute expediting

Nothing magical. Just fewer surprises.

And fewer surprises usually mean better margins.

Forecasts vs. Reality: Reviewing and Adjusting

Forecasting isn’t about being right all the time.

It’s about being less wrong, earlier.

Business Central allows you to:

• Create multiple forecasts
• Copy and adjust forecasts
• Compare forecasted demand to actual outcomes

Even a simple review—once a month or once a quarter—can surface patterns worth paying attention to.

Where were we consistently over?
Where were we short?
What assumptions no longer hold?

That feedback loop is where forecasting really starts paying off.

Common Mistakes (That Are Easy to Avoid)

A few pitfalls show up again and again.

First, forecasting everything. Not every item deserves a forecast. Focus on items where forward planning actually matters.

Second, forgetting to run planning. Forecasts don’t influence anything unless planning is executed.

Third, treating forecasts as promises instead of expectations. Forecasts guide decisions—they don’t guarantee outcomes.

If you keep those in mind, you’re already ahead of the curve.

Why Demand Forecasting Feels Heavier Than It Is

Forecasting has a reputation for being complex, rigid, and time-consuming.

In Business Central, it doesn’t have to be.

You’re not building a predictive model.
You’re not chasing statistical perfection.
You’re simply giving your system better information earlier.

For busy professionals, that’s a relief.

The Human Side of Forecasting

One personal observation.

The most successful forecasting setups I’ve seen aren’t driven by software—they’re driven by conversations.

Sales shares what they’re hearing.
Operations shares what they’re seeing.
Leadership shares where the business is headed.

The forecast becomes a shared assumption, not a hidden calculation.

And Business Central becomes the place where that assumption turns into action.

Bringing It All Together

Demand forecasting in Dynamics 365 Business Central isn’t about predicting the future.

It’s about planning with intention.

It helps you:

• See demand before it becomes urgent
• Align purchasing and production earlier
• Reduce reactive decision-making
• Make planning feel less stressful

So here’s a question worth thinking about:

What would change if your planning process knew what you already expect to happen?

Ready to Use Forecasting More Effectively?

If demand forecasting in Business Central feels underused—or a bit unclear—you’re not alone. Most teams don’t need more features; they need clearer guidance and smarter setup.

If you want help turning standard Business Central forecasting into something genuinely useful for your business, reach out to This email address is being protected from spambots. You need JavaScript enabled to view it..

Sometimes a short conversation is all it takes to make planning feel manageable again.