Supply Forecasting Methods

 Presented by :
◦ Nesma Ahmed Mohamed
◦ Michael Samair Moawad
◦ Mohamed Ahmed Hassanin
◦ Ahmed Zakaria Mohamed
◦ Mohamed Abdelkhalek Abdelwahab
1. Definition
 Human Resource supply forecasting is the process of estimating
availability of human resource which is followed by demand
forecasting.
 For forecasting supply of human resource, we need to consider
internal supply and external supply of human resources.
 Internal supply of human resource available by way of transfers,
promotions, retired employees & recall of laid-off employees, etc.
 external supply of human resource is, availability of labor force in the
market and by way of new recruitment.
2. Definition Cont’d
 External supply of human resource depends
on some factors mentioned below. Supply
and demand of jobs.
◦ literacy rate of nation.
◦ rate of population
◦ industry and expected growth rate and
levels
◦ technological development.
◦ compensation system based on education,
experience, skill and age.
3. Techniques for supply forecasting
 Succession analysis
 Once a company has forecast the demand for labor, it needs an
indication of the firm's labor supply. Determining the internal
labor supply calls for a detailed analysis of how many people
are currently in various job categories or have specific skills
within the organization. The planner then modifies this analysis
to reflect changes expected soon as a result of retirements,
promotions, transfers, voluntary turnover, and terminations.
4. Techniques for supply forecasting Cont’d

 The purpose of supply forecasting is to determine the size and quality

of present and potential human resources available from within and
outside the organization to meet the future demand of human
resources. Supply forecast is the estimate of the number and kind of
potential personnel that could be available to the organization

 In the next figure internal supply forecasting can be estimated based

on the following:
 Current Staffing Level
 Projected Outflows This Year
 Projected Inflows This Year
5. Techniques for supply forecasting Cont’d
Markov Analysis
 Markov Analysis—transition probability
matrix is developed to determine the
probabilities of job incumbents remaining in
their jobs for the forecasting period.
 The technique is named after Russian

mathematician Andrei Andreyevich Markov,

Markov Analysis cont’d
 A transition matrix, or Markov matrix, can be used
to model the internal flow of human resources.
 These matrices simply show as probabilities the
average rate of historical movement from one
job to another
 For a line worker, for example, there is a 20%
probability of being gone in 12 months, a 0%
probability of promotion to manager, a 15%
probability of promotion to supervisor, and a
65% probability of being a line worker this time
next year.
Markov Analysis cont’d
 Such transition matrices form the bases for
computer simulations of the internal flow of
people through a large organization over
time.

 We can use Markov analysis as a best method

because it uses a mathematical and statistics
logic and we can increase its accuracy by
refining the sample.