DEMAND FORECASTING

Session No-03
What is Demand forecasting?

Forecasting is a tool used for predicting

future demand based on
past demand information.
Why is forecasting important?
Demand for products and services is usually uncertain.
Forecasting can be used for…
• Strategic planning (long range planning)
• Finance and accounting (budgets and cost controls)
• Marketing (future sales, new products)
• Production and operations
Market Demand Functions

5-4
Demand Forecasting Methods
Types of forecasting methods

Qualitative methods Quantitative methods

Rely on subjective opinions Rely on data and analytical

from one or more experts. techniques.
 METHODS OF FORECASTING
Forecasting techniques are broadly classified into
two – Qualitative and Quantitative techniques.
Qualitative Techniques
O Are subjective, based on the opinion and
judgment of consumers and experts. Used for
long term forecasting. It includes
1. Delphi Method
2. Market Survey Method
Quantitative Techniques
Forecasting is done using the past data. It
includes
1. Trend Projection using Least Square Method
2. Moving Average Methods