Demand Forecasting Methods

 Presented by :
◦ Nesma Ahmed Mohamed
◦ Michael Samair Moawad
◦ Mohamed Ahmed Hassanin
◦ Ahmed Zakaria Mohamed
◦ Mohamed Abdelkhalek Abdelwahab
1. Time Series(Trend Analysis)
 Trend projection uses your past sales data to project your future
sales. It is the simplest and most straightforward demand forecasting
method.
  it helps prevent businesses from spending resources on products
that may not be successful with their target audience and instead
allows them to create products that meet the desires and priorities of
their customers
 It is very useful for comparative analysis of date in order to measure
the financial performances of firm over a period of time and which
helps the management to take decisions for the future i.e. it helps to
predict the future
2. Judgmental (Market research)
 uses customer surveys and questionnaires in order to predict future
demand. This forecasting technique is ideal for businesses that do
not have historical sales data available such as when a new product
is released

 Market research can give you a better picture of your typical

customer. Your surveys can collect demographic data that will help
you target future marketing efforts. Market research is particularly
helpful for young companies that are just getting to know their
customers
3. Judgmental (Sales force composite)
 A method commonly used by companies for short-term
forecasts is to take advantage of their field staff's intimate
knowledge of customers' needs and market conditions by
asking them to forecast the company's sales for their respective
areas for the coming season or year

 Your salespeople have the closest contact with your customers.

They hear feedback and take requests. As a result, they are a
great source of data on customer desires, product trends, and
what your competitors are doing. 
4. Judgmental (Delphi method)

 This method requires engaging outside experts and a skilled

facilitator.

 You start by sending a questionnaire to a group of demand

forecasting experts. You create a summary of the responses from the
first round and share it with your panel. This process is repeated
through successive rounds. The answers from each round, shared
anonymously, influence the next set of responses. The Delphi
method is complete when the group comes to a consensus.
 This demand forecasting method allows you to draw on the
knowledge of people with different areas of expertise. The fact that
the responses are anonymized allows each person to provide frank
answers. Because there is no in-person discussion, you can include
experts from anywhere in the world on your panel. The process is
designed to allow the group to build on each other’s knowledge and
opinions. The end result is an informed consensus.
5. Judgmental (Econometric)

 The econometric method requires some number crunching. This

technique combines sales data with information on outside forces
that affect demand. Then you create a mathematical formula to
predict future customer demand.

 This method accounts for relationships between economic factors.

Best Demand Forecasting method
 In our opinion we will go for the trend
analysis forecasting method as there is no
suggestions or opinions about this method.
 It is depending on a bundle of calculation for

minimizing the error and increasing the

accuracy of the forecasting.
 The only problem with this method that it

requires historical data used by the

organization itself.
Best Demand Forecasting method
cont’d
 If the organization doesn’t have a historical
data, we should go for the Delphi method .
 The opinions of the experts and market

surveys can increase the forecasting accuracy

and minimize the risk.