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Demand Forecasting

Demand Forecasting

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Published by er.jaspreet

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Published by: er.jaspreet on Sep 29, 2009
Copyright:Attribution Non-commercial


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Forecasting of demand is the art of predicting demand for a product or service at some  future date on the basis of certain present and past behavior patterns of some related events.A demand forecasting is not a speculative exercise into the unknown but, essentially,reasonable judgement of future probabilities of the market events. It cannot be 100 precise but it gives a reliable approximation regarding the possible outcome, with reasonable accuracy.
Forecasting of demand is the art of predicting demand for a product or service at some  future date. Hence it plays an important role in the process of planning and decision making at micro as well as macro level. Expansion of output of the firm should be based on the estimates of likely demand, otherwise there may be over production and losses may have to be faced.For controlling the business on a sound footing, it is essential to have proper budgeting of costs and profits that is based on forecasting.Similarly, a satisfactory control of business inventories raw materials, semi-finishe products, finished products, spare parts requires satisfactory estimates of future requirements, which can be traced through demand forecasting.Demand forecasting at macro level is of great help to the planners and policy makers for better planning and rational allocation of country’s resources. Though, it is not fool proof and correct but it helps in evaluating various forces which affects demand.
Scope of demand forecasting:
Forecasting can be at Micro as well as macro level. The scope of it will depend upon the area of operation in the present and in future. Much would depend up on the cost and time involved in relation to the benefit of the information acquired through the study of demand.
Methods of Demand forecasting:
Demand Forecasting( NATIONAL ANALYSTS )
National Analysts effectively generates demand estimates for clients in an array of industry sectors by: 
Identifying and describing the current and futurcompetitive  landscape .
Generating  forecasts for contingencies in as yet uncertain/undecided  product profiles or competitive options.
Anticipating demand among different market segments .
Calibrating survey-derived demand estimates to predict actual—not  just relative—revenue or usage volume.
Integrating the influence of multiple decision makers on acquisition and usage.National Analysts has a long history of forecasting new product  performance for clients in pharmaceuticals/biotechnology, financiaservices, package transport, information technology, and energy/utilities.
Competitive Landscape
A common error in demand forecasting is to ask potential decision makers what they would purchase or use without properly sensitizing them to environmental and competitive conditions that are likely to exist at a time in the future when the product will be introduced.For example, pharmaceutical firms need to forecast usage of a drug well before introduction, but to obtain estimates of usage that are reasonably reliable, it is critical to account for available brands and generic alternatives as well as the regulatory and reimbursement environment which is likely to appear when the new drug is introduced.Competitive Timeline Because National Analysts has considerable industry and markeexpertise, we are able with client input to do a reasonably good job of anticipating future competitive, regulatory, and/or market conditions. Once 

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