This action might not be possible to undo. Are you sure you want to continue?
Demand Forecasting:The activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets. Demand forecasting may be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market. (A) Survey Methods:Survey methods are generally used where purpose ultimate short run forecast of demand. Under these methods servings are conducted to correct information about consumer intentions and their future purchase planes further survey and end use method. In complete enumeration methods these are some limitations- (i) It can be successfully used in case of their products whose consumers are concentrated in certain region or locality (ii) This method can't be used in wide spread markets sample survey method has also disadvantages such (i) sometime, reliability of data is missing. (ii) It can be of greater use in forecasting where quantifications of variables is not possible and behaviour is subject to change. In opinion polls methods, there are three methods more (a) Expert opinion methods:Expert opinion method is simple and inexpensive but has some limitations (i) estimates provided by sales representatives are reliable only to extent of cheers skill to analyze the market (ii) Demand estimates may more the subjective judgment of the assessor which may lead to over or under estimation (iii) The assessment of market demand based on inadequate information available to sales representations. (b) Delphos method:This technique is an extension of simple expert opinion pole method there experts may revise estimates of forecast of other experts along with other assumptions. Here, the unconstructed opinions of the experts may conceal the fact that information used by experts in expressing their forecasts may be based on sophisticated techniques. (c) Market Studies and Experiments:Here, firms select some areas of the representative markets having similar features population income levels etc. Then market experiments are carriedout. But this method had few disadvantages (i) Experimental methods are very expensive and cannot be carried by small firms (ii) These methods are based on short term and controlled conditions markets and results may not be applicable (iii) Tinkering with price increases may cause a permanent loss of customers to competitive brands that might have been tried. (B) Statistical Methods:Statistical methods are considered to be superior techniques of estimation of demand due to reasons as (i) method of estimation is scientific (ii) estimates are relatively reliable (iii) the element of subjectivity is minimum (iv) estimation involves smaller costs statistical methods of demand projection include the following techniques Trend Projection methods It is classical method of forecasting which is concerned with the study of movements of variables through time or cause and effect relationship is not revealed by this method, the projections made on trend basis are considered by many as mechanical approach trend method can be projected by
lease square method and box tanking method.Graphical method. Exponential trend is technique used in Graphical method. It is represented as Y = a + bT + cT2 .three techniques based on time series data.