Supply-Neutral versus Unconstrained Demand

This column discusses what is commonly known as unconstrained demand, which represents customer demand devoid of any impacts due to supply limitations. It recommends extending the concept to focusing on “supply-neutral” demand that also re ects demand devoid of distortions due to supply surpluses and other supply-related factors. Over time, forecasting demand that is not supply-neutral can “condition” customers to demand product based on available supply rather than on true demand needs. Several examples of these distortions in real-world settings are discussed and forecast data cleansing methods are recommended to estimate true demand from the data.