Who should be in charge of sales forecasting?

Governance Across Sales, Purchasing, Pricing, and the Supply Chain

Three services, three demand forecasts

A company that thinks it has only one sales forecast is almost always mistaken. In reality, three departments calculate different versions of the forecast, without necessarily realizing it.

Each service starts with a different constraint:

• Sales and marketing start with a goal to achieve—a revenue target, market share, or a commitment made to senior management. Structural bias: optimism, since no one builds a sales plan based on the assumption of stagnation.
• Purchasing starts with the opposite constraint—avoiding ending up with excess inventory that ties up cash and ends up on clearance. Structural bias: caution, since when in doubt, we order a little less, never a little more.
• The supply chain operates at a third level: that of physical flow—truck loading, warehouse capacity, and transportation costs. Structural bias: smoothing is done at the network level to optimize logistics, not necessarily at the store level, which reflects the fine details of commercial reality.

Three legitimate approaches. Three different figures.

And in the vast majority of organizations, there is no mechanism in place to address these issues before they take effect—a breakdown here, excess inventory there, or an end-of-month meeting that turns into a settling of scores.

In addition to these three perspectives, there is a fourth factor that is all too often overlooked in discussions of governance: pricing. A demand forecast almost always translates first into a pricing or promotional decision, even before it results in an order.

Ignoring pricing in forecast governance is like managing the cause without managing its most visible consequence for the customer. The price displayed on the shelf or online is often the first place where a forecast variance becomes apparent—long before inventory becomes available or a stockout is displayed.

The Symptoms of an Ungoverned Forecast

An organization that produces four competing forecasts without realizing it does not notice this immediately. The problem manifests itself through symptoms that are often misdiagnosed as inventory issues rather than governance issues.

Symptom 1: Simultaneous stockouts and excess inventory across different categories

A retailer may, in the same week, experience stockouts in a category experiencing strong sales momentum—the store was right about the trend, but purchases didn’t keep up—and excess inventory in another category that the supply chain restocked based on a logistics plan that was out of touch with on-the-ground reality.

This isn't a problem of a forecast that's generally incorrect. It's a problem of three forecasts that were never compared with one another.

Symptom 2: End-of-month meetings that turn into disputes over numbers

Each department defends its metric by citing a different reason:

• Retailers are defending their lost revenue by pointing to supply shortages.
• Purchasing managers defend their cautious approach by pointing to the markdown rate from previous months.
• The supply chain defends its logistics decisions by pointing to the transportation costs it has avoided.

Everyone is right about their own metric, but no one is looking at the same baseline figure. As a result, the steering committee spends more time reconciling different interpretations of reality than it does deciding anything for the coming month.

Symptom 3: Forecasting becomes a political issue rather than a professional one

When there is no common framework, each department learns to defend ITS forecast rather than challenge the most accurate figure. The debate shifts from actual demand to who is right—a self-perpetuating dynamic that makes each subsequent cycle more difficult than the last.

Symptom 4: Pricing inherits all the biases, without being at the table

Pricing often silently absorbs these three biases without ever being linked to their trade-offs. A promotion launched based on an optimistic sales forecast—without challenging the volume assumption with the purchasing department—results in eroded margins.

This eroded margin does not appear in the financial statements until several weeks later—well after the pricing decision has been made. It is a problem just as costly as the first three, but one that is rarely identified as such in steering committees.

Why Every Department Is Right—and That's Exactly the Problem

The natural reaction to these symptoms is to look for someone to blame—the department that is “at fault.” This is a misdiagnosis.

Each function properly optimizes the metric against which it is evaluated. The problem is not the bias of each department; it is the lack of a mechanism for them to communicate with one another before a decision is made.

None of these biases is an individual fault. They are the logical consequences of incentive systems that were never designed to work together.

Forecasting governance does not seek to eliminate these biases—it seeks to make them visible, to confront them, and to turn them into an explicit point of decision-making rather than an implicit source of conflict.

Pricing, in particular, pays a heavy price for the lack of this dialogue. It is the function that translates a forecasting discrepancy into euro amounts visible to the customer the fastest—even before a warehouse has made a move or inventory has become available.

Who is responsible for what among sales, purchasing, supply chain, and pricing?

The question “Who should lead the sales forecasting process?” has a wrong default answer—“the department with the most data” or “the one who speaks up the loudest in meetings”—and a structurally sound answer: no one should lead it alone, but someone must be responsible for overseeing it.

To put it this way: a single baseline forecast circulates among these five functions—each enriches it with its own perspective, and none of them recalculates it on its own in a corner. This is the difference between true governance and mere coordination based on good will, which falls apart as soon as the timeline tightens. The most common misconception at this stage—treating this operational forecast as if it had to match the budget approved in January—deserves its own discussion: see the dedicated article in this report.

What a Single, Managed Forecast Actually Changes

The principle behind this approach is not new: it’s S&OP (Sales & Operations Planning), or its streamlined version—IBP (Integrated Business Planning) —in its most mature form. The central idea can be summed up in one sentence: a single baseline forecast, enriched and challenged by each function based on its expertise, rather than four independent forecasts that are attempted to be reconciled after the fact.

It's not primarily a question of tools—it's a question of processes and roles. But the effect, which has been documented, is real:

The improvement does not stem from a more sophisticated statistical model—the departments involved were already using reasonable calculation methods, each on their own. The improvement comes from eliminating the delay and the disconnect between the time a demand discrepancy arises and the time the entire organization takes it into account.

Pricing is often the one element missing from this elimination of lead time. It is the function that most quickly reflects a forecasting discrepancy in the customer's experience—through a price, a promotion, or a discount.

And yet, it is rarely invited to the table where that figure is determined. As a result, the department most exposed to the consequences of an inaccurate forecast is often the one with the least say in challenging it early on.

Implementing a Streamlined S&OP Process in Five Steps

A comprehensive S&OP process, with its formalized monthly committees and strict schedule, is often out of reach for a medium-sized retailer—and isn’t necessary to achieve the main benefit. A streamlined version, built around five principles, is sufficient to reconcile the four competing forecasts, including pricing.

Booper has published a dedicated guide on the calculation methodology that underpins this shared framework—including the necessary data, the method for generating the figure, and accuracy metrics such as MAPE—titled “Sales Forecasting with AI: Methodology and KPIs.” This guide assumes that this figure already exists somewhere within the organization, often in multiple versions—and focuses on the question of which one should be considered authoritative, and who decides.

Four Common Misconceptions About S&OP

• “This is a process reserved for large corporations.” False: The streamlined version described above is based on five principles—not on specialized software or a full-time planning department. A medium-sized retailer can implement it in just a few monthly cycles.
• “We don’t need another meeting.” The problem isn’t the number of meetings; it’s their purpose. An arbitration meeting that resolves a documented discrepancy effectively replaces, in practice, several crisis meetings that merely assess the damage after the fact.
• “Consensus obscures useful signals.” Well-designed governance does not seek consensus—it seeks arbitration. Disagreement between sales and procurement on a particular category remains a valuable signal; it must be visible and debated, not quietly averaged out in a spreadsheet.
• “A single baseline forecast eliminates the nuances of each business line.” On the contrary: it is the lack of a common framework that forces each function to rely on its own estimate, since it cannot challenge those of others with shared arguments.

One shared forecast, not four competing forecasts

The sales, purchasing, supply chain, and pricing departments aren’t wrong when they each produce their own interpretation of demand—they’re doing their jobs, based on the metrics by which they’re evaluated. The problem is never the existence of these four assessments; it’s the lack of a space where they can be compared before they impact the store—a stockout, excess inventory, a poorly calibrated promotion, or a meeting that devolves into a dispute over numbers.

A streamlined S&OP process does not replace any of the existing areas of expertise. It provides them with a common framework, a regular forum for discussion, and an arbiter—and that is what transforms competing forecasts into a single, well-supported decision.

The broader topic of what happens to a forecast once it informs a decision is addressed in the flagship article of this special report, and the most costly consequence of poor governance—stockouts—is discussed in the dedicated article in this special report.

Want to look beyond your organization's four competing forecasts?

Spend 30 minutes with our team to identify where, within your current process, sales, procurement, supply chain, and pricing are unintentionally out of sync.

Let's plan an exchange →

Frequently Asked Questions

Also in this series

• Sales Forecasting: Methods, AI, and Best Practices (The Essential Guide)
• Sales Forecast vs. Budget: Why These Are Two Different Processes
• Out-of-Stock Situations: The Direct Link to Poor Sales Forecasting

Sources

• Gartner, " Gartner Survey Shows Only 29% of Supply Chain Organizations Have Built the Necessary Capabilities to Deliver on Future Performance," press release, February 18, 2025 (survey of 579 supply chain professionals, July–October 2024) — gartner.com
• McKinsey & Company, “The Transformative Power of Integrated Business Planning,” May 25, 2022 — mckinsey.com
• McKinsey & Company, " Pricing in Retail: Setting Strategy," April 1, 2015 — mckinsey.com
• Bain & Company, “Good Sales and Operations Planning Is No Longer Good Enough,” April 12, 2016 — bain.com
• Booper, internal product data (`context/socle_booper.md` §3) — GENIUS Predict, scenarios, and AI explanations.