How does "Promotional Planning" affect demand forecasting in IBP?

Promotional planning plays a significant role in demand forecasting within SAP Integrated Business Planning (IBP) as it directly incorporates upcoming promotions into the forecasting process. When promotions are anticipated, they can significantly influence customer behavior and buying patterns, leading to a surge in demand for specific products. By including information about planned promotions, demand planners can adjust their forecasts to reflect these changes, ensuring that they account for the expected increase in sales during promotional periods. This ability to refine forecasts leads to more accurate inventory management, better allocation of resources, and improved service levels, ultimately providing a more responsive and effective supply chain.

In contrast, the other choices fail to acknowledge the true impact of promotional activities on demand forecasting. Simply relying on historical data without considering future promotions would overlook critical elements that can drive demand.