During the holiday season, a late delivery can sometimes feel like the end of the world. You’ve been there: you order a highly anticipated gadget, new clothes, or a last-minute gift, only to find out that your delivery is delayed. While many blame shipping companies or delivery drivers, the true culprit often lies deeper in the supply chain — at the heart of it all: forecasting.

Retailers live and die by their ability to predict demand — how many products customers will buy and how fast they’ll need them. If they get it wrong, the consequences are clear: frustrated customers, lost sales, and a tarnished reputation, and during this time of year, a ruined holiday. But the secret to avoiding these pitfalls isn’t about being precise, it’s about being prepared. When it comes to supply chains, the best strategy might be to overestimate, not to underestimate, demand.

Here’s why: supply chains are complex, and certain elements are difficult, if not impossible, to scale up on short notice. You can’t just snap your fingers and have more warehouse space, more delivery trucks, or more workers ready to handle a sudden surge of orders.

Underestimating demand and then scrambling to catch up creates chaos — and inevitably, delays. No company wants to be the one that forces consumers to wait.

By forecasting on the high side, businesses can ensure they have enough resources in place, no matter how much demand actually shows up. It’s a strategy that puts customer satisfaction front and center, avoiding the all-too-familiar headaches of late deliveries or out-of-stock products. While it’s certainly a balancing act (after all, you don’t want to be stuck with excess inventory or wasting money on unnecessary labor), overestimating demand generally ensures smoother operations in the long run.

This approach might sound counterintuitive at first — wouldn't a business want to avoid overspending on resources? The truth is, it’s far more costly to disappoint customers than to have a little excess capacity. Think about it: if a company has prepared for a high volume of orders but ends up with fewer than expected, they can always adjust. But if they underprepare and run out of stock or capacity, the damage is done, and no amount of apologies will bring back those lost customers.

And let’s not forget about bottlenecks. Some aspects of a supply chain simply can’t be expanded quickly—things like delivery trucks, warehouse space, or even skilled labor are hard to ramp up on a moment’s notice. If a company ignores these constraints, they could be left with piles of inventory and no way to get it to customers on time. The solution? Forecast high, plan big, and avoid those bottlenecks before they happen.

The next time you find yourself impatiently tracking your online order, consider this: the companies that get it right are the ones that have forecasted demand with a little extra cushion. They’re not taking risks by gambling on the “perfect” prediction — they’re preparing for the best possible customer experience.

In the world of modern retail, where speed and satisfaction rule the day, a little overestimation could be the secret to keeping your orders on track. It’s all about making sure your supply chain can keep up with your customers’ expectations. Because in the end, it’s better to be prepared for a flood than to drown in a trickle.

Debdatta Sinha Roy is a senior research scientist and co-lead for the AI Foundation product in Oracle's Retail Science R&D team. He’s also a member of INFORMS.