Demand forecasting by Sachin Bhurase

Demand forecasting by Sachin Bhurase

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  A Presentation On… DEMANDFORECASTING… Presented By: Guided By : Manjushree Kamble Mr. Prashant Sir Sidhharth Dhanedhar Sachin Bhurase
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  What is Demand…? Demand is the consumer’s need or desire to own the product or experience the service.  It’s constrained by the willingness and ability of the consumer to pay for the good or service at the price offered.  DEMAND = DESIRE + WILLINGNESS + ABILITY TO PAY (MONEY)
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  What is Forecasting…? Forecasting is the process of making predictions of the future based on past and present data most commonly by analysis of trends.
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  What is DemandForecasting…?  Refers to the prediction of probable demand for a product or a service on the basis of the past events and prevailing trends in the present.  Demand forecasting is comprised of a series of steps that involves the anticipation of demand for a product in future under both controllable and non- controllable factors.
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  Objectives of DemandForecasting  To Achievement of Planned objectives.  To Preparing Budget.  To Stabilization of Production and Employment.  To Future Expansion Business.  To Plan Long term Investment Programs.  To Control of Inventories.
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  Steps in DemandForecasting Specifying the objective Determining the time prospective Choices of methods for demand forecasting Collection of data and data adjustments Estimation and interpretation of results (Monitoring Results)
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  Importance of DemandForecasting  Planning and production analysis.  Sales forecasting.  Control of business.  Helpful for planners and policy makers.  Planning for Distribution of Resources.  Helps in avoiding Wastage of Resources.
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  Methods of DemandForecasting
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  Qualitative Methods • Involvesa group of experts who eventually develop a consensus • They usually make long range forecast for future technologies Delphi Method Merits: 1. Time saving 2. Useful for new product Demerits: 1. Bias 2. Risk of loss of confidential information
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  Qualitative Methods • Involvesa group of experts who eventually develop a consensus • They usually make long range forecast for future technologies Delphi Method Merits: 1. Time saving 2. Useful for new product Demerits: 1. Bias 2. Risk of loss of confidential information
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  • Sales peopleare a good source of information with regard to customers future intentions to buy a product Sales Force Opinions Merits: 1. Easy and cheaper 2. Collection wisdom of salesmen's Demerits: 1. Carry Biases 2. Short run only 3. Salesmen are not trained
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  • Involves agroup of experts within organization. • Long run Demand Forecasting. Expert Opinion Method Merits: 1. Time Saving 2. Saving Resources 3. Long term forecasting Demerits: 1. High Costs 2. Biased forecast
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  • By usinga customer survey a firm can base its demand forecast on the customers purchasing plans Customer Survey method 1. Complete Enumeration Survey: Door to Door survey 3.Test marketing survey : Representative of Households 2. End use method : Producer Goods
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  • Forecasting controllingexpenditure on advertisement and try to find out effect on demand • Assuming other things are constant • Change in packaging Controlled Experiment Method
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  Quantitative Methods • Trendprojection method • On the basis of data regarding sales of past years and demand • Chronological orderly sales Data. Time Series Analysis Secular Trend Seasonal Variation Cyclic Variation Irregular Variation
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  • Indicates changesin atmospheric pressures. • Forecast future trends on the basis of movements in the index of economic indicators Barometric Techniques
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  • To accessrelationship between two variables from historical data • On or more independent variables and one dependent variable Regression Analysis