DEMAND FORECASTING

WHAT IS DEMAND FORECASTING?

DEMAND FORECASTING IS A COMBINATION OF TWO WORDS DEMAND AND FORECASTING

DEMAND - Demand for any commodity refers to the amount of that commodity that will be purchased at a particular price during a particular period of time.

FORECASTING It means a prediction or estimation of a future event.

DEMAND FORECASTING

Forecasting customer demand for products and services is a proactive process of determining what products are needed where, when, and in what quantities. Consequently, demand forecasting is a customerfocused activity.

OBJECTIVES OF DEMAND FORECASTING

Reduces

future uncertainties, helps to study markets that are dynamic , volatile and competitive. managers to plan personnel, operations of purchasing & finance for better control over wastes inefficiency and conflicts. Control-Reduces reserves of slack resources to meet uncertain demand. forecasting builds stability in operations.

Allows

Inventory

Effective Setting

Sales Targets, Pricing policies, establishing controls and incentives.

Forecasting Horizons.
Short Term (0 to 3 months): for inventory management and scheduling. Medium Term (3 months to 2 years): for production planning, purchasing and distribution. Long Term (2 years and more): for capacity planning, facility location, and strategic planning.

STEPS

THE FORECAST

Step 6 Monitor the forecast Step 5 Prepare the forecast Step 4 Gather and analyze data Step 3 Select a forecasting technique Step 2 Establish a time horizon Step 1 Determine purpose of forecast

SO ,WE KNOW WHAT ITS ALL

ABOUT!!!

NOW LETS ANALYSE THE

METHODS OF DEMAND

FORECASTING.

Experience Based Method Survey Method Collective opinion Method Trend projection Method Economic Indicators

CRITERIA OF A GOOD FORECASTING METHOD

ACCURACY SIMPLICITY ECONOMY AVAILABILITY CAPACITY TO UPDATE FORECASTS