Managerial Economics - Demand Forecasting Steps

1. DEMAND FORECASTING
Asnad.P.A

2. Steps In Demand Forecasting
• Determining Purpose for which the Forecast is
used.
• Subdivide Demand Forecasting Programme in
small parts on the basis of Products or Sales
territories or Market.

3. • Determine the factors effecting sale of the
Product and their relative importance.
• Select the Forecasting methods.
• Study activities of the Competitors.
• Prepare Preliminary sales estimates after
collecting necessary data.

4. • Analyze advertisement policies, Sales
Promotion plans, Personal Sales etc.
• Evaluate the demand forecasting monthly,
quarterly, half yearly or yearly and necessary
adjustments should be done.
• Prepare Final Demand Forecast on the basis
of preliminary forecast and the results of
evaluation.

5. CRITERIA FOR A GOOD FORECASTING
METHOD
• Accuracy in forecast
• Plausible
• Economical

6. CRITERIA FOR A GOOD
FORECASTING METHOD
• Quick Results
• Durability
• Flexibility

7. CONCLUSION
A good forecasting method should be
appropriate
with
particular
demand
situation, should be technically efficient
economically ideal. It should be accurate,
plausible, economical, quick in yielding
results, durable and finally flexible.