Demand forecasting is the process of predicting future demand for products and services to help companies make production, inventory, pricing, and sales decisions. There are two main types of demand forecasting: short-term forecasting, which looks out up to one year and considers sales policies, prices, purchases, and investments, and long-term forecasting, which helps with production planning, new plant decisions, and sales/pricing strategies over longer periods, though it is more difficult due to uncertainty. Demand forecasting methods include surveys of opinions, experts, consumers, as well as statistical techniques like time series analysis, regression, and correlation analysis.

1. DEMAND FORECASTING

2. INTRODUCTION
• Forecasting means estimating the future
possibilities of a particular incident or
situation expected to happen.

3. Demand forecasting
• Demand Forecasting is the process by which every
new and established firms are following to predict
the demand for their products & services to make
managerial decisions necessary.
• Sales forecasting and demand forecasting are one
and the same which suggests developments and
corrective actions related to production function,
inventory control and managerial actions.

4. TYPES OF DEMAND FORECASTING
• According to requirements of business
organisations, time span and planning of
production, demand forecasting will be done
in two types.
• They are : 1) short-term demand forecasting.
2) Long – term demand forecasting.

5. short-term demand forecasting
• It is especially limited to short periods,
generally for one year.
• It depends on policies relating to sales,
purchases, price and investment.
• It is necessary to make decisions regarding
prices
• This price forecasting helps in sale policy
formulation.

6. Long – term demand forecasting
• It helps the management to know the long
term demand for its products which also helps
to take production, sales and pricing decisions.
• Planning of a new plant or expansion of an
existing unit depends on long-term demand.
• . When forecast are mode covering long
periods, the probability of error is high.

7. • Prof. C. I. Savage and T.R. Small classify
demand forecasting into three types.
They are 1. Economic forecasting,
2. Industry forecasting,
3. Firm level forecasting

8. Methods of forecasting

9. 1. Survey Method:
Survey Method:
A. Opinion survey method:
B. Expert opinion method
C. Delphi Method
D. Consumers interview method

10. 2. Statistical Methods:
2. Statistical Methods:
a. Time series analysis or trend projection
methods
b. Barometric Technique
c. Regression and correlation method