National Technological of Mexico

Hermosillo Technological Institute

HOMEWORK #1 - UNIT 2
Forecasting, Demand, Service Sector Forecasts

Operations Management
M.I. Alfonso Cisneros Campos

Industrial Engineering

NAME CONTROL NUMBER

Morales Rivera Ximena 20331264

Group: A5A

Hermosillo, Sonora. October 04, 2022.

CHAPTER 1
Introduction
This document will discuss the issues of forecasting and demand, and the foreasting
in the service sectors. Their definitions, types that exist, characteristics, features, etc.
will be mentioned below. Forecasting will help provide a picture of how well the
industry is thriving and the demand for what price is best for the product in the
market right now.

CHAPTER 2
What is forecasting?
Forecasting refers to the practice of predicting what will happen in the future by
taking into consideration events that happened in the past and present. It is a tool
that helps businesses in the future by
examining historical data and trends.

Forecasting characteristics and

features.
Some of the characteristics of this is that it
is a specific point in time and the change
of that point generally alters the forecast,
next the uncertainty, since if the
administrator were certain about the
circumstances that will exist at a given time, the preparation of a forecast would be
insignificant and finally it is the confidence of the person who makes the forecast on
the information contained in historical data.
Some of the features of making a forecast are: it involves future events, is based on
past and present events, and uses forecasting techniques.

Types of forecasting.
There are two types of forecasts: qualitative and quantitative.

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Qualitative forecasts: are those that are based on the experience, intuition and
judgment of the forecaster. Among the most important are: Delphi method, market
research, panel consensus, visionary forecasting and historical analogy.
Quantitative forecasts: are those that are based on statistical data and use
computational and mathematical tools to predict the future. The major areas of this
class of forecasting are time series and causal models. The first is subdivided into
smoothing and decomposition methods and the Box-Jenkins methodology, and the
second into regression analysis, econometric models and input-output.

What is demand?
Demand is the quantity of consumers who are willing
and able to buy products at various prices during a
given period of time. Demand for any commodity
implies the consumers' desire to acquire the good, the
willingness and ability to pay for it.

Demand characteristics and features.

Some characteristics of demand is that it is dynamic in
nature, this means the demand for a product never
stays the same in the market, depends on price and
on supply, it controls the future of business, is
sensitive to the competition, this is that the demand on the product will be at a peak
when you have a monopoly in the market.

Types of demand
There are seven types of demand: joint, composite, shot-run and long-run, price,
income, competitive, direct and derived demand.
1. Joint demand is the demand for complementary products and services.
2. Composite demand happens when there are multiple uses for a single
product.

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 3. Short-run demand refers to how people will immediately react to price
changes while elements are fixed, and in the long-run, companies have a
chance to adjust to the new situation by decreasing labor or increasing prices
and supplies.
4. Price demand relates to the amount a consumer is willing to spend on a
product at a given price.
5. As consumers make more income, quantity demand increases. This means
people will buy more overall when they earn more income.
6. Competitive demand occurs when there are alternative services or products a
customer can choose from.
7. Direct demand is the demand for a final good. Also called autonomous
demand. Derived demand is the demand for a product that comes from the
usage of others.

What are service sector forecasts?

Forecasting in the service sector uses an important technique in the commercial
sector is the monitoring of demand by keeping adequate short-term records.
Forecasting is a crucial part of the operations manager's role. Demand forecasts
drive the firm's production, capacity, and scheduling systems and affect financial,
marketing, and personnel planning functions.

Service sector forecasts characteristics and features

The characteristics that services sector possess and that distinguish them from
products are:
● Intangibility: These cannot be seen, tasted, felt, heard or smelled prior to
purchase.
● Variability: two similar services will never be identical or the same.
● Inseparability: in services, production and consumption are partially or totally
simultaneous.

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 ● Perishability: services cannot be stored, due to the simultaneity between
production and consumption.
● No Ownership: Buyers of services acquire a right to receive a provision, use,
access or lease of something, but not their ownership. After rendering they
only exist as lived experiences.

Types of service sector forecasts

● Maintenance services: They are those that offer to maintain under a
preventive method the items that require their care.
● Home service: These are those that the client uses without leaving his home
and that he hires by telephone or Internet.
● Rental services: They are those that the person hires to satisfy a momentary
need or for some time.
● Workshop services: These are the services offered by individual persons in
the care of the maintenance and repair of some item of necessity. They
usually work inside a workshop.

CHAPTER 3
Conclusion and recommendations
After reading and analyzing all the information about this topic I can conclude that
this is something important for the business to get better in with their clients/market.
We got to know how this works, the pros and cons, characteristics and try to do

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better for the product in the industry to sell them the better we can. Forecasting will
help in the price of the product cause it will analyze the demand on the market from
the past and present.

CHAPTER 4
Bibliography
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