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DEMAND FORECASTING AT

TATA MOTORS
A Case study

Sales of Tata Motors


Year

Sales in Crores (Rs.)

Percentage increase (%)

2004-05

17199.17

2005-06

20088.63

16.8

2006-07

26664.25

32.73

2007-08

28767.91

7.89

2008-09

25660.67

-10.8

Sales of Tata Motors


Sales in Crores (Rs.)
35000
30000

25000
20000
Sales in Crores (Rs.)

15000
10000
5000

0
2004-05

2005-06

2006-07

2007-08

2008-09

Trend Equation
Equation for the line:
Y = a + bX
Y intercept and slope of the line using :
Y = Na + bX
XY = a X + bX2

Trend Projection
Sales in
Crores (Y)

X2

XY

17199.17

17199.17

20088.63

40177.26

26664.25

79992.75

28767.91

16

115071.64

25660.67

25

128303.35

Y= 118380.63

X= 15

X2= 55

XY = 380744.17

Trend Projection
Substituting the values from the table in
above equations:
1,18,380.63 = 5a + 15b
380744.20 = 15a + 55b
By solving above, we get
a = 15995.43
b = 2560.23

Demand Forecasting
Year

a+bX

Sales forecasted

2005

15995.43+2560.23(1)

18555.66

2006

15995.43+2560.23(2)

21115.89

2007

15995.43+2560.23(3)

23676.12

2008

15995.43+2560.23(4)

26236.35

2009

15995.43+2560.23(5)

28796.58

2010

15995.43+2560.23(6)

31356.81

Observations
Year

Sales
forecasted

Percentage Profit Percentage Profit Percentage


Change After Tax Change Before Tax Change

Sales

2007-08

23676.12

28767.91

2028.92

2008-09

26236.35

25660.67

-10.7

1001.26

-50.7

2576.47

1013.76

-60.7

Conclusion
Therefore the demand forecasted for the year
2009-10 would be Rs.31, 356.81.
Demand contraction in 2008-09 was due high
interest rates and unavailability of finance
particularly during the global financial
upheavals in 2008.