You could forecast hourly if you wanted to. You could forecast annually. Neither extreme makes sense for most businesses. The right forecasting cadence balances responsiveness against effort—matching your planning rhythm to your actual decision-making needs.
The Case for Monthly Forecasting
Monthly forecasting is the default for most businesses, and for good reason.
When Monthly Works Well
Long lead times: If your supplier lead time is 8-12 weeks, weekly forecast updates don't change your near-term orders. Monthly is sufficient.
Stable demand: Products with consistent week-to-week sales don't need frequent forecast adjustments. Monthly reviews catch trends without overreacting to noise.
Limited resources: If one person manages forecasting alongside other responsibilities, monthly is more sustainable than weekly.
B2B / Wholesale business: Wholesale orders typically batch into monthly patterns anyway. Weekly forecasting creates false precision.
Monthly Forecasting in Practice
Timing: Forecast at the beginning or end of each month for the next 3-6 months.
Process: Review actuals vs. forecast, update assumptions, regenerate forecasts, share with stakeholders.
Effort: 2-4 hours per month for a 100-500 SKU business.
Output: Monthly demand buckets that feed into inventory planning and purchase orders.
The Case for Weekly Forecasting
Weekly forecasting adds overhead but provides meaningful benefits for the right situations.
When Weekly Works Better
Short lead times: If you can restock in 1-2 weeks, weekly forecasts let you react faster to demand changes.
Volatile demand: Products with significant week-to-week variability benefit from more frequent review. You catch trends and anomalies faster.
High-velocity operations: If you're placing orders weekly anyway, weekly forecasts align with your ordering cadence.
E-commerce / D2C: Consumer demand can shift quickly based on marketing activities, seasonality, or external factors. Weekly tracking keeps you current.
Promotional periods: During heavy promotional activity, weekly reviews help you respond to actual performance vs. forecast.
Weekly Forecasting in Practice
Timing: Same day each week, ideally early in the week with previous week's final numbers.
Process: Review last week's actuals, update rolling forecasts, adjust near-term orders if needed.
Effort: 30-60 minutes per week for a focused review.
Output: Weekly demand estimates for the next 8-12 weeks, with most attention on weeks 1-4.
Choosing Your Cadence
Use this decision framework:
Lead Time Test
If your lead time is > 6 weeks: Monthly is probably fine—you're planning far enough ahead that weekly updates don't change near-term decisions.
If your lead time is < 4 weeks: Weekly forecasting enables faster response to demand changes.
Volatility Test
Calculate your demand coefficient of variation (standard deviation / mean) at the weekly level.
CV > 0.3: High volatility—weekly forecasting helps you stay responsive.
CV < 0.2: Low volatility—monthly forecasting captures trends without overreacting.
Resource Test
Be honest about capacity. A poorly-executed weekly process is worse than a well-executed monthly process. Start with what you can sustain.
Business Model Test
Made-to-order: Monthly is usually fine—production schedules need longer planning horizons.
Stock-from-inventory: Weekly becomes more valuable—you're making replenishment decisions frequently.
Hybrid Approaches
You don't have to choose one cadence for everything.
Different Cadences for Different SKUs
Hero products (top 20% of volume): Weekly review—these matter most and warrant closer attention.
Core products (middle 60%): Bi-weekly or monthly review.
Long tail (bottom 20%): Monthly review—don't spend time on SKUs that don't move the needle.
Monthly Forecast, Weekly Review
Set forecasts monthly but review actuals against forecast weekly. This catches problems early without requiring full re-forecasting every week.
When weekly actuals deviate significantly from forecast, update the forecast mid-month.
Seasonal Shifts
Run monthly forecasting during steady periods. Shift to weekly during peak seasons or major promotional events when demand is volatile and stakes are higher.
Making Weekly Forecasting Sustainable
If you move to weekly forecasting, build a process you can maintain:
Time-Box the Review
30-60 minutes maximum. Longer reviews suggest you're going too deep or your data isn't ready. Fix the inputs rather than spending more time.
Focus on Exceptions
Don't review every SKU every week. Focus on:
- SKUs with significant variance from forecast
- SKUs approaching stockout
- SKUs with upcoming events (promotions, new distribution)
Automate the Prep Work
Pulling data shouldn't take time. Set up automated reports that compare actuals to forecast and highlight variances. Start your weekly review with data ready.
Document Decisions
Keep a quick log of forecast changes and why. This builds institutional memory and helps you learn from forecast errors.
Common Mistakes to Avoid
Over-Forecasting with Too-Short Cadence
Updating forecasts daily based on daily sales creates whiplash. You end up chasing noise rather than signal. Even weekly forecasting should look at week-over-week trends, not day-to-day movements.
Under-Forecasting with Too-Long Cadence
Quarterly forecasting is too slow for most operations. By the time you notice a trend, you're out of position. Monthly is the right minimum for most businesses.
Inconsistent Cadence
The worst outcome is sporadic forecasting—weekly sometimes, skip a few weeks, monthly, back to weekly. Pick a cadence and stick to it. Consistency beats optimization.
Cadence Mismatch with Decisions
If you place orders weekly but forecast monthly, you're making decisions between forecast updates based on gut feel. Align forecasting with your ordering cadence.
Key Takeaways
- Monthly forecasting works for long lead times, stable demand, and resource-constrained teams
- Weekly forecasting adds value with short lead times, volatile demand, and high-velocity operations
- Consider hybrid approaches: different cadences for different SKUs or seasonal adjustments
- Whatever cadence you choose, consistency matters more than perfection
- Time-box weekly reviews and focus on exceptions rather than comprehensive analysis
- Align forecasting cadence with your ordering cadence
Frequently Asked Questions
Q: Should I forecast weekly or monthly?
Match your cadence to your lead time and demand volatility. Short lead times (<4 weeks) and volatile demand favor weekly. Long lead times and stable demand favor monthly.
Q: How do I transition from monthly to weekly forecasting?
Start with a hybrid: keep monthly forecasts but add weekly reviews focused on exceptions. Once that's sustainable, shift to full weekly forecasting.
Q: Is daily forecasting ever worthwhile?
For most businesses, no. Daily noise overwhelms signal. Some high-volume retail operations with same-day fulfillment might benefit, but they're the exception.
Q: How far out should my weekly forecast extend?
Plan detail for weeks 1-4, directional estimates for weeks 5-12. Beyond 12 weeks, monthly buckets are usually fine.
Q: What's the minimum I should be doing?
Monthly at minimum. Review actuals vs. forecast, update assumptions, and regenerate forecasts each month. Anything less and you're flying blind.