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Dr. Pulkit TrivediFollow

May. 30, 2023•0 likes•12 views

May. 30, 2023•0 likes•12 views

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Economy & Finance

Demand forecasting is the process of using predictive analysis of historical data to estimate and predict customers' future demand for a product or service

Dr. Pulkit TrivediFollow

- 2. Demand Forecasting • Estimation of a future event based on present and past data.
- 3. Need of Demand Forecasting • New Facility Planning • Production Planning • Workforce Scheduling • Financial Planning
- 4. Need of Demand Forecasting • New Facility Planning ⚬ Designing and building a new facility (factory0 or designing and implementing a new production process may take as long as five years even more.
- 5. Need of Demand Forecasting • Production Planning ⚬ The rate of producing the products must be matched with the demand which may be fluctuating over the time period in the future.
- 6. Need of Demand Forecasting • Workforce Scheduling ⚬ The forecasts of monthly demand may further be broken down to weekly demands and the workforce may have to be adjusted to meet these weekly demands.
- 7. Need of Demand Forecasting • Financial Planning ⚬ Sales forecasts are the driving force in budgeting, sales forecasts provide the timing of cash inflows and also provides a basis for budgeting the requirements of cash outflow for purchasing materials, payment to employees and to meet other expenses of power and utilities etc.
- 8. Forecasting Time Horizon • 3 Categories of Forecasts ⚬ Short Range Forecast ⚬ Medium Range Forecast ⚬ Long Range Forecast
- 9. Types of Forecasts • 3 Types of Forecasts ⚬ Technological Forecasts ⚬ Economic Forecasts ⚬ Demand Forecasts
- 10. Types of Forecasts • Technological Forecasts ⚬ Concerned with rates of technological progress • Economic Forecasts ⚬ Statement of expected future business condition. • Demand Forecasts ⚬ Projection of demand for a compnay's products or services throughout some future period.
- 11. Steps in the Forecasting Process • Decide Forecasting Objective • Select the items for which forecasts are needed • Determine the time horizon for the forecast • Select the forecasting model (Method of technique) • Gather and analyse the data needed for the forecast • Prepare the forecast • Monitor the forecast
- 12. Methods of Forecasting • Qualitative Method ⚬ Decision Makers Intuition, experience & knowledge ￭ Jury of executive opinion ￭ Sales Composite Method ￭ Market Research Method ￭ Other Judgmental Method (Delphi Method)
- 13. Methods of Forecasting • Quantitative Method ⚬ Time Series Models ￭ Naive Approach ￭ Moving Averages Method ￭ Exponential Smoothing Method ⚬ Causal Models ￭ Trend Projection ￭ Linear Regression analysis