What does 'Scenario Planning' mean?

Scenario planning is a crucial feature of demand planning software that enables businesses to model and analyze multiple potential future situations based on varying market conditions, demand shifts, or supply chain disruptions. This functionality allows users to create "what-if" scenarios to evaluate the impact of different variables on production, inventory, and resource planning. By comparing outcomes across various scenarios, organizations can develop contingency plans, mitigate risks, and make more informed strategic decisions. Scenario planning enhances flexibility and preparedness, helping businesses respond proactively to uncertainties and market changes. It ultimately supports better forecasting accuracy, optimized resource allocation, and improved operational resilience.