This document discusses demand management and forecasting. It defines demand management as recognizing and managing all demands for a product. Major factors affecting demand include general business/economic conditions, market trends, and a firm's advertising/promotion plans. Demand shows customer needs while sales reflect what is actually sold, which may be less or more than demand. Forecasting is used to develop plans to satisfy demand before receiving customer orders. Common forecasting methods include qualitative techniques based on expert judgment and quantitative techniques that use historical data like moving averages and exponential smoothing.

1. DEMAND MANAGEMENT
1

2. IDT`17 Supply Chain Workshop
DEMAND MANAGEMENT >>
THE FUNCTION OF RECOGNIZING AND MANAGING ALL
DEMANDS FOR A PRODUCT .
2

3. IDT`17 Supply Chain Workshop
MAJOR FACTORS WHICH AFFECT ON DEMAND :
• GENERAL BUSINESS & ECONOMIC CONDITIONS .
• MARKET TRENDS .
• THE FIRM’S OWN PLANS FOR ADVERTISING ,PROMOTION
AND PRODUCT CHANGES .
3

4. DEMAND VS SALES
• SHOWS THE NEED OF THE ITEM
• WE USE IT IN FORECASTING
• WHAT’S ACTUALLY SOLD
• MAY BE LESS , MORE THAN
DEMAND
4

5. DYNAMICS
• CHANGE OVER TIME
• AFFECT : TREND
,SESSION,RANDOMNESS .
STABLE
• THE SAME GENERAL SHAPE
• EASY TO FORECAST
5

6. IDT`17 Supply Chain Workshop
DEMAND BATTERN >>
6

7. IDT`17 Supply Chain Workshop
DEMAND SOURCES >>
• FORECASTING
• CUSTOMER ORDER
• INTERNAL CUSTOMER
• OTHER SOURCES
7

8. IDT`17 Supply Chain Workshop
WHY FORECASTING ??
• DEVELOPING PLANS TO SATISFY DEMAND.
• NOT WAITING THE ORDERS TO PRODUCE.
• DELIVERY IN REASONABLE TIME.
• TO PROVIDE CAPACITY & RESOUCES TO MEET THAT DEMAND.
• NECESSARY IN “MTS “ &”MTO”.
8

9. IDT`17 Supply Chain Workshop
FORECASTING CARACTERISTICS
• FORECASTING IS ALWAYS WRONG.
• LONG TERM IS USUALLY LESS ACCURATE.
• FORECASTS IS USUALLY MORE ACCURATE for groups.
9

10. IDT`17 Supply Chain Workshop 10

11. IDT`17 Supply Chain Workshop
FORECAST METHODS >>
QUALITATIVE QUANTITATIVE
11

12. IDT`17 Supply Chain Workshop
QUALITATIVE TECHNIQUES >
• BASED ON JUDMENT & INFORMED OPNIONS.
• Long term.
• Do not require a history
• Usually not very accurate.
12

13. IDT`17 Supply Chain Workshop
QUALITATIVE METHOD >
• Experts judgment.
• Delphi method.
• Grass Roots.
13

14. IDT`17 Supply Chain Workshop
QUANTITATIVE METHOD >>
• Based on Data.
• Gives Exact numbers
14

15. IDT`17 Supply Chain Workshop
QUANTITATIVE METHODS >>
•Moving average.
•Exponential smoothing.
15

16. IDT`17 Supply Chain Workshop
>>MOVING AVERAGE :
PERIOD DEMAND
1 1000
2 2000
3 3000
4 4000
5 5000
6 ??
FORECASTING (6)
=(1000+2000+3000+4000+5000)/5
=3000 !! (NOT ACCURATE)
=(3000+4000+5000)/3= 4000
(NOT PERFECT BUT BETTER)
THE LESS BERIODS INCLUDED ,THE
BETTER
16

17. IDT`17 Supply Chain Workshop
PERIOD
“ N “
ACTUAL
DEMAND
“A”
FORECAST
“F”
ERROR
|A-F|
(ERROR)^2
1 38 37 (based on last data) 1 1
2 36 39 (based on last data) 3 9
3 42 (36+38)/2=37 5 25
4 45 (42+36)/2=39 ? ?
5 38 ? ? ?
17

18. IDT`17 Supply Chain Workshop
FORECASTING ERORS >>
18

19. IDT`17 Supply Chain Workshop
BY:
MENNAT_ALLAH MOHEY
19