The document discusses demand forecasting, which involves predicting future demand for a product. Demand forecasting is undertaken for business decision making and forward planning. It discusses the purposes and time horizons of forecasts, as well as factors to consider like the product type and forecasting method. The document outlines short, medium, and long term forecast horizons. It emphasizes that forecasts should be clear, simple, accurate, economical, and timely. Statistical and survey methods are presented as approaches to demand forecasting.

1. Presented by : Aditya kashyap
M.S.Ramaiah

2.  Predicting or estimating the future demand
for a product
 Undertaken for the purpose of planning and
decision making

3.  Business Decision Making
 Forward Planning and Scheduling
 Acquiring Inputs
 Making provision for finance
 Formulating pricing strategy
 Planning advertisement

4.  Purposes of forecasting
 Length of forecasts
 levels:
◦ Macro-level
◦ Industry level
◦ Firm level
 general or specific (product- wise)?
 New or well established products.

5.  Type of product
◦ Producer goods
◦ Consumer goods
◦ Consumer durables (for other industries )
◦ Services

6.  Short Term (0 to 3 months): for inventory
management and scheduling.
 Medium Term (3 months to 2 years): for
production planning, purchasing, and
distribution.
 Long Term (2 years and more): for capacity
planning, facility location, and strategic
planning.

7.  Specifying the Objective
 Determining the time Perspective
 Determining the type of good
 Selecting a proper method of forecasting
 Collection of data
 Interpretation of results

8.  Clarity
 Mention assumptions, methodology and
sources.
 Avoid using vague generalities.
 Give the possible margin of error.
 Make use of charts and graphs for easy
comprehension.

9.  Simplicity and ease of comprehension.
 Accuracy
◦ degree of deviations between forecasts and actuals
◦ the extent of success in forecasting directional
changes.
 Economy (cost)
 Maintenance of timeliness.

10. Methods of
Demand
Forecasting
Survey Statistical
Methods Methods

11.  Consumer Survey Methods
◦ Complete Enumeration Method
◦ Sample Survey Method
◦ End Use Method
 Opinion Methods
◦ Experts Opinion Method
◦ Test Marketing Method
◦ Delphi Method

12.  Trend Analysis
 Time Series
 Regression

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