Demand forecasting, Finance, Operations, Supply chain management

1. JSPM’s
Rajarshi Shahu College of Engineering
Tathawade , Pune:33
Presentation on
Topic: “ Demand Forecasting ”
Department of MBA
Date: 13.04.2020
Presented By :
Name of student: Bhushan Vijay Phirke
Roll Number: 191415
Subject : Operation & Supply chain management
(MBA-Sem II)

2. Demand Forecasting

3. Demand Forecasting
• Meaning: It is the activity of estimating the quantity of
Products and/ or Services required that the consumer
will be willing to purchase.
• Techniques: Demand forecasting techniques involves:-
1. Informal methods such as Educated Guesses
2. Quantitative methods such as the use of Historical
sales data or current data from the test markets

4. Applications of Demand
Forecasting
• Demand forecasting may be used in :-
1. Making pricing decisions
2. Assessing future capacity requirements
3. In making decision to whether to enter a new
market or Not.

6. Forecasting Time horizons
Time Period
• Short term
1. 3 – 6 months, Operating decisions
2. E.g. Production planning
• Medium term
1. 6 months to 2 years, Tactical decisions
2. E.g. Employment changes
• Long term
1. Above 2 years, Strategic decisions
2. E.g. Research and Development

7. Sources of data for Forecasting

8. Accuracy of forecast
• 1) The accuracy of the forecasts can only be
practically measured against available data;
however, when the data is available,
those forecasts aren’t true forecasts anymore,
being statements about the past rather than being
statements about the future. Thus, those
measurements are referred as the empirical
accuracy, as opposed to the real accuracy.

9. Popular Accuracy Matrices
1. MAE (mean absolute error)
2. MAPE (mean absolute percentage error)
3. MSE (mean square error)
4. sMAPE (symmetric mean absolute percentage
error)

10. Capacity planning
• Forecasting and capacity planning ensure that
resource are managed so that customer demand is
met in the right amount, at the right time, with the
right quality.
• Demand forecasting helps companies determine
the supply of products and services needed to
meet customer demand.
• Any adjustments to the overall capacity of
operations are made based on long-range
customer demand forecasts and the organization's
current capacity to meet them.

11. Conclusion
• Importance of Demand forecasting:
1. Essential to Produce the Required Quantities at the
Right Time
2. To Adopt Suitable Price Policy
3. It is Helpful in the Maximization of Profit
4. Increased Customer Satisfaction
5. Better Shipping or Logistics Management

12. Thank You..
Questions??