1. DEMAND FORECASTING

2. INTRODUCTION
• Forecasting means estimating the future
possibilities of a particular incident or
situation expected to happen.

3. Demand forecasting
• Demand Forecasting is the process by which every
new and established firms are following to predict
the demand for their products & services to make
managerial decisions necessary.
• Sales forecasting and demand forecasting are one
and the same which suggests developments and
corrective actions related to production function,
inventory control and managerial actions.

4. TYPES OF DEMAND FORECASTING
• According to requirements of business
organisations, time span and planning of
production, demand forecasting will be done
in two types.
• They are : 1) short-term demand forecasting.
2) Long – term demand forecasting.

5. short-term demand forecasting
• It is especially limited to short periods,
generally for one year.
• It depends on policies relating to sales,
purchases, price and investment.
• It is necessary to make decisions regarding
prices
• This price forecasting helps in sale policy
formulation.

6. Long – term demand forecasting
• It helps the management to know the long
term demand for its products which also helps
to take production, sales and pricing decisions.
• Planning of a new plant or expansion of an
existing unit depends on long-term demand.
• . When forecast are mode covering long
periods, the probability of error is high.

7. • Prof. C. I. Savage and T.R. Small classify
demand forecasting into three types.
They are 1. Economic forecasting,
2. Industry forecasting,
3. Firm level forecasting

8. Methods of forecasting

9. 1. Survey Method:
Survey Method:
A. Opinion survey method:
B. Expert opinion method
C. Delphi Method
D. Consumers interview method

10. 2. Statistical Methods:
2. Statistical Methods:
a. Time series analysis or trend projection
methods
b. Barometric Technique
c. Regression and correlation method