In many companies, sales forecasting is an integral part of a critical process for matching global demand and supply that is sometimes referred to as sales and oper- ations planning or S&OP (Mentzer and Moon 2004a). Figure 5.4 offers a simplified picture of how sales forecasting contributes to the S&OP process. As seen in Figure
5.4, an enterprise can be thought of as consisting of two primary functions: a demand function and a supply function. Demand is the responsibility of sales and marketing. In many companies, the sales organization is responsible for generating and maintaining demand from large end-use customers, or from wholesale or retail channel partners. Marketing is usually responsible for generating and maintaining demand from end consumers. Supply is the responsibility of a number of func- tions, including manufacturing, procurement, logistics or distribution, human resources, and finance. It is also the responsibility of a variety of suppliers,