Demand variability - Refers to the fluctuation or variation in the demand for a product or service over a

certain period of time. It can be influenced by various factors such as seasonality, market trends,
economic conditions, and consumer behavior.

Forecasting - The practice of predicting what will happen in the future by taking into consideration
events in the past and present data and analysis

Factors Affecting Demand Variability

Price Changes: Changes in the price of a product or service can directly impact demand.

Consumer Preferences: Changes in consumer preferences, tastes, and trends can impact demand
variability

Seasonality: Seasonal factors can also affect demand variability. For example, demand for winter
clothing is typically higher in colder months, while demand for outdoor recreational equipment may
peak in the summer.

Marketing and Advertising: Effective marketing and advertising campaigns can influence consumer
behavior and lead to changes in demand.

External Events: External events such as natural disasters, economic crises, or public health emergencies
can also affect demand variability.

Forecasting Methods

Qualitative method are research techniques used to gather non-numerical data, typically focusing on
understanding people’s experiences, perspectives, and behaviors.

Quantitative method are research techniques that involve the collection and analysis of numerical data.
These methods are used to quantify the relationship between variables, test hypotheses, and generalize
results to a larger population.

Benefits of Effective Demand Management

Improved Customer Service- result in higher customer retention rates, increased customer loyalty, and
positive word-of-mouth referrals, ultimately leading to improved business performance and profitability.

Cost Reduction-the process of lowering expenses and optimizing resources to improve the efficiency and
profitability of a business.

Competitive Advantage- Enables a business to attract more customers, generate higher sales, and
achieve better financial performance compared to its competitors.
Challenges in Demand Forecasting

Demand Volatility- How much the demand for something goes up and down. If it changes a lot, it’s
volatile.

Data Accuracy- refers to how correct and reliable a set of data is

Market uncertainty- means not knowing for sure what will happen in the market in the future. This
could be because of things like changing customer preferences, economic ups and downs, or unexpected
events.