01-11-2022

DEMAND FORECASTING
"Demand Forecasting is an estimate of Demand during a specified period. Which
estimate is tied to a proposed marketing plan and which assumes a particular set
of uncontrollable and competitive forces" According to Cundiff and Still,

In the words of Prof. Philip Kotler. The company (sales) forecast is the expected
level of company sales based on a chosen marketing plan and assumed marketing
environment"

According to Evan J. Douglas, "Demand forecasting may be defined as the process

of finding values for demand in future time periods.“

Demand Forecasting refers to the process of predicting the

future demand for the firm’s product. In other words,

demand forecasting is comprised of a series of steps that

involves the anticipation of demand for a product in future

under both controllable and non-controllable factors.

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The cost should be controlled by producing correct level of goods

in the firm and also according to the demand for those goods in

the market. For the estimation of demand, demand forecasting is

to be done by the firm.

Forecasting = estimation of future situations.

Forecasting reduces or minimizes the uncertainty.

By forecasting effective decisions can be taken for tomorrow.

Demand forecasting is based on the determinants of the demand.

Demand for goods increases and gives sales.

Sales are the primary source of the income for a firm.

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The objective of demand forecasting is attained only when the forecasting is

done systematically and scientifically. Thus, the following steps in demand
forecasting are followed to facilitate a systematic estimation of future
demand for product:
 Specifying the Objective

 Determining the Time Perspective

 Choice of method for Demand Forecasting

 Collection of Data and Data Adjustment

 Estimation and Interpretation of Results

Thus, demand forecasting is a systematic process that assumes greater

significance in large-scale producing firms. Demand forecasting may not
be a serious issue for the small scale firms which supply a small portion
of total demand or produces the product that caters to the short demand
or seasonal demand. Such firms can plan their production on the basis of
the business skills and their past experiences.
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