Category: Business CentralRead time: 5 MinsPublished on: 3 Dec 2025

Demand Forecasting in Microsoft Dynamics 365 Business Central

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In today’s dynamic supply chain landscape, the ability to anticipate demand has become a necessity. Demand Forecasting in Microsoft Dynamics 365 Business Central is a prediction of future customer demand for items, helping businesses plan production and purchases in advance. It utilizes historical sales data or manual input to ensure materials and products are available when needed without overstocking.

Many teams refine their forecasting setup with guidance from Dynamics 365 Business Central consulting services, especially when modelling scenarios or integrating AI forecasting.

In this article, our experts examine how demand forecasting operates in Business Central, outlines the setup process, and explains how companies can leverage it to achieve more agile, cost-efficient, and customer-focused operations.

1. What is Demand Forecasting in Business Central?

In Business Central, a demand forecast represents the expected future demand for an item, whether from sales or production needs, across defined time periods.

These forecasts act as the foundation of proactive planning. Instead of relying on sales orders, planners forecast demand and prepare inventory in advance, resulting in smooth operations, better cash flow management, and fewer stockouts or overstock situations.

In essence, Business Central’s demand forecasting helps ensure the right stock is in the right place at the right time.

2. How to Set Up Demand Forecasting in Business Central

Imagine a company that sells water heaters. Before winter, they use demand forecasting to predict how many units might sell based on last year’s sales. This helps them produce and stock enough units just before winter. For example, let’s assume they are expecting to sell at least 250 units in November 2025.

Navigation & Setup -

Open & Set Up Demand Forecast -

  • In the Business Central search bar, type and choose “Demand Forecast”.
  • Then use the ‘New’ action to create a demand forecast by giving a name and description.
    A sample screenshot display of a new demand forecasting dashboard in Business Central.
  • Click ‘Edit Demand Forecast’ to configure the units needed and the time/period in which we are forecasting the demand.
    A sample screenshot of details in a demand forecasting case in Business Central.
  • Change the view to ‘Month’ and navigate the range to ‘April 2025’ for the item ‘Water Heater’.
    A sample screenshot containing updation of details in demand forecasting dashboard in Business Central.
  • Note: The ‘Water Heater’ item has a reordering policy of ‘Fixed Reorder Qty.’ and a reorder quantity of ‘50’.
    A sample Business Central screenshot of fixed reorder quantity in demand forecasting dashboard.
  • To verify whether the planning engine includes a demand forecast, search and navigate to the ‘Requisition Worksheets’ page for calculating the plan.
    A sample Business Central screenshot of requisition worksheets in demand forecasting dashboard.
  • Then, provide the date range (since we entered forecast entry for November 2025) and enter the forecast name for the efficient calculation.
    A sample screenshot of a demand forecasting plan dashboard in Business Central.
  • Below is the result from the planning engine, which provides efficient calculation including the demand forecast of 250 quantities needed on the month of November for the Water Heater.
    A sample screenshot of a demand forecasting results screen in Business Central.

3. Turning Demand Forecasts into Competitive Advantage in Business Central

Demand forecasting in Business Central isn’t just about predicting sales; it’s about aligning your entire supply chain around forward-looking insights. By combining manual control, AI-driven intelligence, and seamless integration with planning tools, businesses can:

  • Reduce lead times
  • Improve service levels
  • Free up working capital
  • Increase operational agility

For manufacturers, distributors, and retailers alike, these benefits directly translate into improved profitability and customer trust.

4. Partnering for Better Demand Forecasting Outcomes in Business Central

Microsoft Dynamics 365 Business Central makes demand forecasting practical, visual, and powerful, whether you rely on manual inputs, Azure AI predictions, or both.

By leveraging Business Central’s forecasting and planning capabilities, you can move from reactive to proactive operations. This ensures that supply always meets demand with precision.

Talk to our experts if your business is exploring ways to enhance planning or optimize inventory with Dynamics 365 Business Central. Our consultants can help you implement forecasting best practices tailored to your industry and workflows.