1. Demand Forecasting

2. Meaning of Demand Forecasting
• A Forecasting is a prediction or estimation of future
situation under given conditions.
• Demand forecasting means expectation about the
future course of the market demand for product.
Demand forecasting is essentially reasonable judgment
of future probabilities of the future demand. It cannot be
100% precise.
• Demand estimation tries to find our expectation on
present sales level, given the present state of demand
determinants.

3. Importance of Demand Forecasting
1. For planning and Production analysis
2. Sales Forecasting
3. Control of Business
4. Inventory Control
5. Long term Investment Programs
6. Maintain Stability
7. Helpful for Planners and Policy Makers

4. Methods of Demand Forecasting

5. Survey Methods
1. Survey of Buyer’s Intention : the consumers are contacted
personally to disclose their future purchase plans.
A. Census Method: All consumers are contacted to know their
preferences for the products in future.
B. Sample Method: method a sample of consumers is selected
for interview.
2. Survey of Sales Forces : The company elicits the opinion of its
sales force regarding the future demand for the product given
an outline of its features and prices
 Collective Opinion Techniques
 Delphi Techniques

6. Statistical Techniques
1. Trend Projection Method: Based on analysis of past sales
patterns. These method dispense with the need for costly market
research because the necessary information is often already
available in the company (Last Five months data to determine)
2. Barometric Technique : one set of data is used to predict another
set. A relevant indicator is used as a barometer of future demand.
3. Simultaneous Equations Method : All the variables are
simultaneously considered as it is assumed that every variable
influences the other variables in an economic environment
4. Correlation and Regression Method: Which speak about the
nature of relationship and extent of relationship respectively
between two given variables, one is dependent and the other one
is independent.

7. Other Methods
1. Expert Opinion: An Expert, who is associated with the insights
of the industry as a whole, is invited to suggest about the future
of a particular product or services.
2. Test Marketing: Releasing the product on a test basis in a well
chosen, limited, but representative market.
3. Controlled Experiments: The company can experiment different
homogeneous markets releasing its product with different types
of appeal as different prices, packaging, models and so on
4. Judgement Approach: to use one’s judgement, where none of
the above methods are suitable to assess demand for a
particular product or service.

8. Demand Forecasting
Thank You & Any Doubts