Demand Forecasting for Better Business Planning

Demand forecasting is a crucial aspect of business decision-making, allowing organizations to estimate future demand for their products or services. Dr. Pooja Singh, an Assistant Professor at Chhatrapati Shahu Ji Maharaj University in Kanpur, explains the art and methods of demand forecasting, its usefulness in planning, factors affecting demand forecasting, and various forecasting techniques used in the industry.

• Demand Forecasting
• Business Planning
• Decision Making
• Economics
• Forecasting Techniques

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1. Demand Forecasting Dr. Pooja Singh Assistant Professor, Department of Economics, School of Arts, Humanities And Social Sciences, Chhatrapati Shahu Ji Maharaj University, Kanpur

2. Demand Forecasting Demand Forcasting Art of predicating demand for a product or service at some future date on the basis of present and past behaviour of some related event. Estimate the demand of product or service within given situation Dr. Pooja Singh, Assistant Professor, Department of Economics, School of Arts Humanities And Social Science, Chhatrapati Shahu Ji Maharaj University, Kanpur

3. Demand Forecasting Usefulness of Demand Forecasting Planning and decision making Business forecasting Production analysis Useful to the consumers Factors of production Dr. Pooja Singh, Assistant Professor, Department of Economics, School of Arts Humanities And Social Science, Chhatrapati Shahu Ji Maharaj University, Kanpur

4. Demand Forecasting Factors Affecting Demand Forecasting A. For non-durable consumer goods Disposable income Price Demography B. For durable consumer goods Social status, Prestige Existence of growth and infrastructural facilities Tax policy and intensity of consumers Price and Credit Facilities Dr. Pooja Singh, Assistant Professor, Department of Economics, School of Arts Humanities And Social Science, Chhatrapati Shahu Ji Maharaj University, Kanpur

5. Demand Forecasting MethodofForecasting 1. Survey of Buyers Intension- The most direct method of estimating demand in short run is to ask customers about their purchase planning in future reference. 2. Collective Opinion Method- Consolidation of expected sales, estimated by salespersons in their respective area. 3. Expert opinion method (Delphi Method)- Opinions of experts are collected and exchanged among them without revealing their identity. This process goes on until some sought of unanimity is arrived at among all the experts. 4. Controlled Method- Under this method an efforts is made to vary separately certain determinants of demand which can be manipulated and conduct the experiments that the other factor remain constant.[The effect of demand determinants like price, advertisement ,packaging etc., on sales can be assessed by either varying them over different markets or by varying them over different time period in the same market.] Dr. Pooja Singh, Assistant Professor, Department of Economics, School of Arts Humanities And Social Science, Chhatrapati Shahu Ji Maharaj University, Kanpur

6. Demand Forecasting 4. Business Barometer- Use of business indicators of various phenomenon Some of important indicators which aid businessmen in demand forecasting are follow- a)Gross National Product (GNP) b)Industrial production c)Consumer credit d)Disposable personal income e)Stock price Dr. Pooja Singh, Assistant Professor, Department of Economics, School of Arts Humanities And Social Science, Chhatrapati Shahu Ji Maharaj University, Kanpur

7. Demand Forecasting 5. Statistical Method- a)Trend Projection Method-This method depends upon time series. Considerable records on sale pertaining to different time periods are collected and then effective demand is forecasted. b)Graphical Method- In this, the forecasting is done with the help of graphs. The sales belonging to previous years are plotted on a graph and a free hand curve is drawn passing through as many points as possible to know the trend in past years.. c)Least Square Method- It is a mathematical procedure for fitting a line to a set of observed data in such a manner that the sum of squared difference between the calculated and observed value is minimised. This technique is used to find a trend line which best fits the available data. This trend is used to project dependent variable in the future. d)Regression Method- A relationship is established between quantity demanded and dependent and independent variable such as income ,price and price of related goods. Dr. Pooja Singh, Assistant Professor, Department of Economics, School of Arts Humanities And Social Science, Chhatrapati Shahu Ji Maharaj University, Kanpur

8. Demand Forecasting Determination of Objective Selection of Product Steps in Demand Forecasting Selection of Method Interpreting the Result Dr. Pooja Singh, Assistant Professor, Department of Economics, School of Arts Humanities And Social Science, Chhatrapati Shahu Ji Maharaj University, Kanpur

9. Demand Forecasting Reference Salvatore, S., Managerial Economics, Mc Graw Hill Publications. Dwivedi D N, Managerial Economics, Vikas Publishing House Pvt. Ltd, 2006 Dr. Pooja Singh, Assistant Professor, Department of Economics, School of Arts Humanities And Social Science, Chhatrapati Shahu Ji Maharaj University, Kanpur