This document provides an overview of demand forecasting. It defines demand forecasting as estimating sales in rupees or physical units for a specified future period under a proposed marketing plan. Demand forecasting is important for production planning, sales forecasting, inventory control, and other business and economic planning activities. The key steps involved in demand forecasting include identifying business objectives, selecting a forecasting method, interpreting results, and considering factors like data availability, accuracy, and simplicity. Limitations include changes in fashion, consumer psychology, lack of experts and past data. In conclusion, demand forecasting is a technique for estimating future demand based on analysis of past demand under current market conditions.

1. Managerial Economics
First semester ---Mid One PPT
IMMANI CHANDRA SHEKAR
REGD. NO. :19K61E0020
SUBJECT CODE :18MS01T2
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2. Mid Topic
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3. Meaning of Demand Forecasting
.Demand forecasting is a combination of
two words; the first one is Demand and
another forecasting.
.Demand means outside requirements of a
product or service.
.In general, forecasting means making an
estimation in the present for a future
occurring event. 3

4. Definition of Demand Forecasting
 According to American Marketing
Association, "Demand forecasting is an
estimate of sales in rupees or physical
units for a specified future period under a
proposed marketing plan".
 According to Evan J. Douglas, "Demand
forecasting may be defined as the process
of finding values for demand in future
time periods".
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5. Needs for Demand Forecasting:
Demand forecasting is very essential in the
course of business decision making.
1. Production Planning .
2. Sales Forecasting .
3. Effective tool in the hands of management.
4. Estimating its Financial Requirements .
5. Inventory Control .
6. Growth and Long-Term Investment Programs.
7. Stability.
8. Essential for Old and New firms .
9. Economic Planning and Policy Making.
10.Guideline for demand forecast for related industries. 5

6. Importance of Demand Forecasting:
1.Price Control: Demand forecasting helps in controlling
prices by matching the output with future expected
demand.
2.Business Planning: Demand forecasting helps in
business planning based on future activities to be taken up.
3.Competitive Strategy: Demand forecasting helps
business to effectively formulate their competitive strategy
in terms of manpower, finances, advertising and other
overheads.
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7. STEPS INVOLVED IN DEMAND FORECASTING:
1. Identification of business objectives.
2. Determining the nature of goods under consideration.
3. Selecting a proper method of forecasting.
4. Interpretation of results .
5. Durability.
6. Accuracy .
7. Availability.
8. Flexibility.
9. Availability of Data.
10. Economy.
11.Simplicity and Ease of Comprehension.
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8. Limitations of
Demand
Forecasting
1. Change in Fashion .
2. Consumer's Psychology .
3. Uneconomical.
4. Lack of Experts.
5. Lack of Past Data .
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9. Conclusion:
 It is a technique for estimation of
probable demand for a product or services
in the future.
 It is based on the analysis of past demand
for that product or service in the present
market condition.
 Demand forecasting should be done on a
scientific basis and facts and events
related to forecasting should be
considered. 9

10. Thank you
SIR
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