What role does forecasting play in the Supply chain of a build to order server manufacturer such as Dell?

With a build-to-order system, companies like Dell usually have significantly less time to respond to customers than it takes to transport components from the suppliers to its assembly plants. Dell builds to order but still relies much on forecasting to predict future demand and determine the quantity of each component that is needed to assemble a PC as well as the plant capacity that may be required to perform the assembly. Dell obtains server components in anticipation of customer orders and therefore they rely on forecasting. To help suppliers make good ordering decisions, Dell shares its forecasts with them once per month (Kapuscinski et al., 2004. These forecasts are generated by Dell’s line of the business marketing department. They also reflect the seasonality in sales.