"Assumptions is one of my favorite subjects," Ross tells the group, "because the process for documenting assumptions and occurrences greatly influences forecast accuracy and the effectiveness of your demand management process."

He explains that there are always underlying assumptions that are made whenever a plan is developed whether it is the demand plan, the sales plan, the marketing plan, or even the supply plan. "However, at this point in time, we are going to focus on the assumptions of the demand plan," Ross says.

He explains that discussion about assumptions (what is assumed will happen in the future) and occurrences (what has happened in the past to impact performance and forecast accuracy) is a fundamental principle of sales and marketing planning. The assumptions frequently focus on the planned effectiveness or the targeted objectives of actions that will be taken to influence the market. Assumptions also focus on external factors, such as competitors and the economy, which affect demand and the condition of the marketplace.

Ross tells the group that in addition to being of tremendous importance for developing effective marketing and sales plans, the documenting of assumptions also has an added benefit. It provides an excellent means of communicating the thought process used to develop the demand plan. It stimulates discussion, allows different views to surface, and is the basis for "what if" simulations and contingency planning.

"Recall the demand dashboard from earlier this morning," Ross says as he displays the graphic (Figure 46) again and points to the...