managerial economics

1. Demand forecastingDemand forecasting
UNDER:- Dr. SANEEM FATIMAUNDER:- Dr. SANEEM FATIMA
PRESENTED BY:- MD NASAR WARSI (T. L. )
MD ZEESHAN JAMALI
MD ZARRAR KHAN
MD RASHID AHMAD
MD DILSHAD AKHTAR

2. Meaning of DeManD
forecasting
Demand forecasting is a process
of estimating the quantity of a
commodity demanded by the
consumer in a specific period of
time

3. iMPortance of DeManD
forecasting
Crucial to supplier, manufacturer or
retailer
Business decision
Planning for future finished goods
Improve quality & effectiveness of
product

4. LeveLs of forecasting
 Macro-level forecasting-
 Focus on the large scale social structures social
process and problems.
 industry-level forecasting-
 It is prepared by different trade associations.
 This is based on survey of consumers intention and
analysis of statistical trends.
 Firm-level forecasting-
 It is related to an individual firm.
 It is most important from managerial view point.

5. Methods of deMand
forecasting
Survey of buyers intentions:-
 This is a short term method of knowing and estimating
customers demand.
 By this the burden of forecasting goes to the buyers.
 This method is useful for the producers who produce
goods in bulk.

6. Collective opinion
 Under this method the salesman are nearest persons
to the customers and are able to judge their minds and
market.
 The estimates of the different salesman are collected
and estimates sales are predicted.
 it makes use of collective wisdom of salesman,
departmental needs and top executives.

7. Delphi techniques
(expert opinion method)
 Under this method experts opinion are sought from
specialists in the field, out side the organizations or the
organization collects opinion from such specialists.
 This method seeks the opinion of a group of experts
through mail about the expected level of demand.
 The responses received are analyzed by an
independent body.

8. Analysis of time series and trend
projection
 This is the most popular method of analyzing time series and is
generally used to project the time trend of the time series
 The trend line is the projected in to the future for purpose of
extrapolation
There are four factors responsible for the characterization of time
series:-
1.fluctuation and turning points
2.trend seasonal variations
3.cyclical fluctuations, and
4.irregular or random forces

9. Economic indicators
This method has its base for demand forecasting on few economic
indicators
A) construction contracts:-
 For demand towards building materials sanctioned for comment
B) personal income:-
 Towards demand of consumers goods
C) agricultural income:-
 Towards demand of agricultural imports
instruments,fertilisers,manner etc
D) automobiles registration:-
 Towards demand of car and petrol there and other economic
indicators are given by specialized organization

10. Controlled experiments
 Under this method and effort is made to ascertain
separately certain determinants of demand which can
be maintained e.g,price,advertising etc.
 Thus the effect of demand determinants like
price,advertisement,packing etc.

11. Judgmental approach
 Under this method opinions are sought from the
executives of different discipline
i.e,marketing,finance,production etc
 Thus this is a process of combining averaging or
evaluating in some other way opinions and views of the
top executives

12. ConClusion
• Accurate demand forecasting requires
– Product knowledge
– Knowledge about the customer
– Knowledge about the environment