Estimating future demand forecast accuracy is crucial for success yet frustratingly difficult. No other aspect of supply chain optimization has greater impact on business profitability, yet it’s easy to blame a “bad” forecast for poor performance. Providing the best one number forecast requires demand planning software that captures data close to its source and accurately predicts actual demand with enough lead time and confidence to ensure maximum sales and operations performance at minimum cost. This paper outlines four key elements that support effective demand planning and establish fundamental parameters for higher service levels and lower inventory cost.