Demand forecasting
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Demand forecasting

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Demand forecasting Presentation Transcript

  • 1. PRESENTATION ON DEMAND FORECASTINGMADE BYKANIKA SINGHAL
  • 2. DEMAND FORECASTING
    IT IS THE TECHNIQUE OF ESTIMATING THE DEMAND IN DISTANT FUTURE. IT IS IMPORTANT BASIS FOR FORMULATING INVENTORY POLICY,PRODUCTION POLICY,MARKETING POLICY BY A PRODUCTION UNIT.
  • 3. PURPOSE/NEED OF DEMAND FORECASTING
    PURPOSE OF SHORT TERM FORECASTING: IT IS DIFFICULT TO DEFINE SHORT RUN FOR A FIRM BECAUSE ITS DURATION MAY DIFFER ACCORDING TO THE NATURE OF THE COMMODITY
    PURPOSE OF LONG TERM FORECASTING: THE CONCEPT OF DEMAND FORECASTING IS MORE RELEVANT TO THE LONG RUN THAN THE SHORT RUN. LONG DURATION MAY GO UPTO 5 TO 10 YEARS.
  • 4. PURPOSE OF SHORT TERM FINANCING
    MAIN PURPOSE OF SHORT TERM DEMAND FORECASTING
    FOR EVOLVING APPROPRIATE PRODUCTION POLICY TO AVOID PROBLEMS OF OVER PRODUCTION UNDER PRODUCTION
    PROPER MGNT. OF INVENTORIES I.E PURCHASING RAW MATERIAL AT APPROPRIATE TIME WHEN THERE PRICES ARE LOW ,& AVOIDING OVER STOCKING .
    TO SETUP REASONABLE SALE TARGET .
  • 5. PURPOSE OF LONG TERM FINANCING
    PLANNING FOR A NEW PROJECT, EXPANSION & MODERNISATION OF AN EXISTING UNIT &TECHNOLOGY UPGRADATION
    ESTIMATION LONG TERM FINANCIAL NEEDS : IT TAKES TIME TO RAISRE FINANCIAL RESOURCES , MORE PARTICULARLY WHEN THE SIZE OF FINANCES NEEDED FOR EXPANSION , MODERNISATION
    ARRANGING SUITABLE MANPOWER: IN THE LONG RUN ,TECHNIQUE OF PRODUCTION MAY CHANGE . TRAINED & SKILLED LABOUR &BUSINESS EXECUTIVES MAY BE NEEDED FOR THE NEW TYPE OF JOB RESPONSIBILITY
  • 6. METHODS OF DEMAND FORECASTING
    OPINION POLLING METHOD
    STATISTICAL METHOD
  • 7. A) OPINION POLLING METHOD
    CONSUMER SURVEY METHOD
    COLLECTIVE OPINION METHOD
    EXPERTS OPINION METHOD
  • 8. A) OPINION POLL METHOD
    IN THE OPINION POLL METHOD ,THE OPINION OF THE BUYERS ,SALES FORCE AND EXPERTS COULD BE SOUGHT TOP DETERMINE THE EMERGING TREND IN MARKET DEMAND .
  • 9. CONSUMER SURVEY METHOD
    IN THIS METHOD, THE REPRESENTATIVES OF THE FIRM APPROACH BUYERS PERSONALLY TO KNOW THEIR VIEWS ABOUT A PARTICULAR PRODUCT AND THERE INTENTIONS FOR THE LIKELY PURCHASE AT A GIVEN PRICE IN THE FUTURE .
  • 10. TYPE OF CONSUMER SURVEY METHOD
    THREE TYPES OF CONSUMER SURVEY METHOD ARE:
    COMPLETE ENUMERATION
    SAMPLE SURVEY METHOD
    END USE
  • 11. 1) COMPLETE ENUMERATION
    IN THE CASE OF COMPLETE ENUMERATION, FIRM HAS TO GO DOOR TO DOOR SURVEY CONTACTING ALL THE HOUSEHOLDS IN THE REGION .
    THE MAJOR LIMITATION OF THIS METHOD IS THAT IT REQUIRES PLENTY OF RESOURCES,MANPOWER & TIME .
  • 12. 2) SAMPLE SURVEY METHOD
    IN CASE OF SAMPLE SURVEY METHOD, SOME HOUSEHOLDS ARE SELECTED ON A RANDOM BASIS AS SAMPLES AND THEIR OPINION ARE TAKEN AS THE GENERALISED OPINION OF THE MARKET THEY BELONG TO .
  • 13. 3) END USE
    IN THIS METHOD THE SALE OF THE PRODUCT UNDER CONSIDERATION IIS PROJECTED ON THE BASIS OF DEMAND SURVEY OF THE INDUSTRIES USING THIS PRODUCT AS AN INTERMEDIATE PRODUCTS .
  • 14. 2. COLLECTIVE OPINION METHOD
    IN THIS METHOD INSTEAD OF CONSUMERS , THE OPINION OF THE SALESMEN WHO ARE IN CLOSE CONTACT WITH BUYERS IS SOUGHT . IT IS P[RESUMED THAT SALESMEN , BEING THE CLOSEST TO CUSTOMER , HAVE THE MOST ACCURATE INFORMATION ABOUT THEIR LIKING ,DISLIKING ,CONSUMPTION PATTERN AND CONSUMER REACTION TO THE FIRMS PRODUCT ETC .
  • 15. 3. EXPERT OPINION METHOD
    INSTEAD OF DEPENDING UPON THE OPINION POLL OF BUYERS ,FIRMS CAN OBTAIN VIEWS OF THE SPECIALISTS OR EXPERTS . THIS IS ALSO KNOWN AS “DELPHI TECHNIQUE” OF INVESTIGATION .
  • 16. B) STATISTICAL METHOD
    TREND PROJECTION METHOD
    BAROMETRIC TECHNIQUE
    REGRESSION METHOD
    SIMULTANEOUS METHOD
  • 17. 1) TREND PROJECTION METHOD
    OUTPUT & SALES OF A FIRM MATY INCRTEASE OR DECREASER OVER A PERIOD OF TIME . LONG RUN TENDENCY OF A TIME SERIEWS TO INCREASE OR DECREASE OVER A PERIOD OF TIME IS ALSO KNOWN AS TREND .
  • 18.
    • TYPES OF TREND PROJECTION METHOD
    GRAPHIC METHOD
    LEAST SQUARES
    TIME SERIES ANALYSIS
  • 19. 1) GRAPHIC METHOD
    THIS IS THE SIMPLE TECHNIQUE TO DETYERMINE THE TREND . ALL VALUES OF OUTPUT OR SALES FOR DIFFERENT YEARS ARE PLOTTED ON A GRAPH & A SMOOTH FREE HAND CURVE IS DRAWN PASSING THROUGH AS MANY POINT AS POSSIBLE .
  • 20. 2) LEAST SQUARE METHOD
    THIS TECHNIQUE IS MOSTLY USED IN PRACTICE . IT IS A STATISTICAL METHOD . ITS HELP A TREND LINE FITTED TO THE DATA . THIS LINE IS ALSO KNOWN AS “THE LINE OF BEST FIT” . THIS SYSTEM OF FORECASTING DOES NOT EXPLAIN THE REASON FOR THE CHANGES .
  • 21. 3) TIME SERIES ANALYSIS
    TIME SERIES IS COMPOSED OF TREND,SEASONAL FLUCTATIONS, CYCLICAL MOVEMENTS & IRREGULAR VARIATIONS . IF THE AVAILABLE DATA IS QUARTER WISE / MONTH WISE IT IS POSSIBLE TO IDENTIFY THBE SEASONAL EFFECT . AND IF THE DATA IS FOR THE SUFFICIENTLY FOR THE LONG PERIOD OF TIME , THE TREND AND CYCLICAL EFFECTS CAN ALSO BE FOUND OUT .
  • 22. 2) BAROMETRIC TECHNIQUES
    IT IS BASED ON THE ASSUMPTION THAT RELATIONSHIP CAN EXIST AMONG VARIOUS ECONOMIC TIME SERIES . FOR E.G : INDUSTRIAL OVER PRODUCTION AND INDUSTRIAL LOAN PROVIDED BY COMMERCIAL BANK MOVE IN THE SAME DIRECTION .
  • 23. BAROMETRIC TECHNIQUE
    LEADING , LAGGINS , & COINCIDENT INDICATORS
    INDEX NUMBERS
  • 24. KINDS OF RELATIONSHIP
    THERE ARE THREE KINDS OF RELATIONSHIP AMONG ECONOMIC TIME SERIES :
    LEADING SERIES
    COINCIDENT SERIES
    LAGGING SERIES
  • 25. 3) REGRESSION METHOD
    IT IS A STATISTICAL TECHNIQUE IS FREQUENTLY USED IN DEMAND FORECASTING . UNDER THIS METHOD ,RELATIONSHIP IS ESTABLISHED BETWEEN QUANTITY DEMANDED AND ONE OR MORE INDEPENT VARIABLE SUCH AS INCOME , PRICE OF RELATED GOOD, PRICE OF THE COMMODITY .
  • 26. CONTINUE………
    IN REGRESSION A QUANTITATIVE RELATIONSHIP IS ESTABLISHED BETWEEN DEMAND WHICH IS A DEPENDENT VARIABLE AND THE INDEPENDENT VARIABLE I.E DETERMINANT OF DEMAND .
  • 27. THANK U