What does the average demand over time help businesses understand?

The average demand over time provides businesses with valuable insights into baseline customer needs. By analyzing this demand, companies can identify a steady level of consumption that represents the typical requirement from customers over a prolonged period. This fundamental understanding is crucial as it helps businesses effectively plan their inventory levels, allocate resources, and personalize their marketing strategies to better meet customer expectations.

When businesses understand baseline customer needs, they can strive to maintain adequate stock levels to satisfy regular demand without incurring excess inventory costs. This foundational knowledge is essential for ensuring customer satisfaction and optimizing operations, making it an integral part of demand forecasting and supply chain management.