What type of forecasting method uses historical data to predict future demand?

Quantitative forecasting is the method that relies on historical data to predict future demand. This approach utilizes statistical techniques and mathematical models to analyze past trends and patterns in data, which allows for the formulation of predictions about future outcomes. By leveraging numerical data such as sales figures, market trends, and seasonal fluctuations, quantitative forecasting can provide concrete insights, enabling businesses to make informed decisions regarding inventory management, production planning, and resource allocation.

On the other hand, qualitative forecasting emphasizes subjective judgment and intuition rather than numerical data, making it more suitable for scenarios where historical data may be scarce or unreliable. Market research, while valuable for understanding customer preferences and market conditions, involves gathering information through surveys and interviews rather than using historical data to create predictions. Therefore, quantitative forecasting is distinctly identified as the method that systematically utilizes historical data to make reliable forecasts about future demand.