Professional Documents
Culture Documents
• Giffen goods
• Commodities which are used as status
symbols
• Expectations of change in the price of the
commodity.
Why do demand curves slope
downwards?
F o re c a s t
P a s s iv e fo r e c a s t s A c t iv e fo r e c a s t s
Purpose of Forecasting Demand
Short Run Forecasts Long Run Forecasts
• Decide on sales policy • Capital planning
• Decide on inventory • Installing production
level. capacity.
• Fixing suitable price. • Manpower planning.
• Deciding on • Financial planning.
Advertisements and
promotional matters.
Steps involved in Forecasting.
1. Identification of objective.
2. Determining the nature of goods under
consideration.
3. Selecting a proper method of forecasting.
4. Interpretation of results.
Levels of Forecast
1. Macro economic forecasting.
2. Industry demand forecasting
3. Firm demand forecasting
4. Product line forecasting.
5. Segment forecasting.
6. New product forecasting.
7. Types of commodities for which forecast is to be
undertaken
8. Miscellaneous factors.
Determinants for Consumer
Durable goods
1. Population
2. Saturation limit of the market.
3. Existing stock of the good.
4. Replacement demand Vs new demand.
5. Income levels of consumers
6. Consumer credit outstanding.
7. Tastes and scales of preference of consumers.
Determinants of Consumer goods
1. Disposable Income.
2. Price.
3. Size & characteristics of population
D = f(Yd,P,S)
Determinants for Capital goods.
1. Growth possibility of the industry of the particular
firm.
2. Norm of consumption of capital goods/unit of
installed capacity.
3. Excess capacity in the industry.
4. Forecast for consumer goods.
5. Existing stock & its age distribution of the capital
goods.
6. Rate of obsolescence.
7. Financial position of the company.
8. Tax provisions on repurchase.
9. Price of Substitute / complementary goods.
Methods of forecasting
F o r e c a s t in g
O p in io n p o llin g m e t h o d s S t a t is t ic a l M e t h o d s
O p in io n p o llin g M e th o d s
C o n s u m e rs s u rv e y S a le s F o rc e o p in io n E x p e rts o p in io n M e th o d
(D e lp h i T e c h n iq u e )