DEMAND

FORECASTING

SUBMITTED BY SUBMITTED TO
DR. SWETA BHATIA
VISHAL KUMAR
MBA 1ST YEAR
JAGANNATH UNIVERSITY, JAIPUR
LEVELS OF DEMAND FORECASTIONING
MICRO LEVEL: It refers to the demand
forecasting by the individual business firm for
estimating the demand for its products.
INDUSTRY LEVEL: It refers to demand
estimate for the product of the industry as the
whole. It relates to the market demand as a
whole.
MACRO LEVEL: It refers to the aggregate
demand for the industrial output by the nation
as the whole.
TYPES OF DEMAND FORECASTING
SHORT TERM FORECASTING
 Relate to a period not exceeding a year.
 Usually day to day information's which are
concerned with tactical decisions under the given
resource constraints ; as in te short run, the
available resource scale of operations ,etc, are
fixed or unalterable, by and large.
 In short term forecasting a firm is primarily
concerned with the optimum utilization of its existing
production capacity.
LONG TERM FORECASTING
 Refers to the forecasts prepared for long period
during which the firm’s scale of operations or the
production capacity may be expanded or reduced.
Long term forecasting permit alternatives in the scale of
production differ from industry to industry and firm to firm.
Relates to in formations which are vital for undertaking
strategic decisions of the business pertaining to its
expansion or contradiction over a period of time.
LONG TERM FORCASTING SERVE THE PURPOSE

BUSINESS PLANNING:-
Long demand potential will provide the required guidelines for
Planning of a new business unit or for the expansion or
Of the exiting one. Capital budgeting by a firm is based
on the long term demand forecasting.

MANPOWER PLANNING:-
It is essential to determine long-term sales forecast for
an appropriate manpower planning by the firm in view of its
long –term growth and progress of the business .

LONG-TERM FINANCIAL PLANNING:

In the view of the long and sales forecasting and the production
planning, it becomes easier for the firm to determine
its long-term financial planning and programmers for
raising the funds from the capital market.
SHORT TERM FORECASTING SERVE THE
FOLLOWING PURPOSE
 EVOLVING SALES POLICY

 DETERMING PRICE POLICY

 EVOLVING A PURCHACE POLICY
 FIXATION OF SALES
 TARGETS
 DETERTERMING SHORT-TERM FINANCIAL
PLANNING
Washington Policy and Analysis with the support of the American
Gas Foundation conducted the study "Fueling the Future: Natural
Gas & New Technologies for a Cleaner 21st Century"

In 2020, emissions of carbon dioxide, the primary "greenhouse"

gas, would be reduced by an estimated 930 million tons annually
if the increased use of natural gas projected in this study is
achieved.

The use of natural gas would also reduce the United States'
dependence on imported oil by an estimated 2.6 million barrels
per day

Further, due to the high quality of the natural gas system and
natural gas appliances, energy consumption is 6 percent lower in
the accelerated scenario than in the current scenario
 FORECASTING METHODS

SURVEY METHODS STATISTICAL

METHODS

Customer Collective Reasoned Market Time series Regression

survey opinion opinion experiments analysis analysis
method method method method

Graphical Semi- Moving Least

method average average square
method method
method
New Opportunities and Challenges in Demand
Forecasting

To exploit an opportunity, we need to be aware of the value

of the different types of information and the subsequent
exploration of it.

1) Information on demand throughput.

2) Information on selling price and product promotion.
Changes in the selling price and the presence of product
promotions are known to have a significant effect on demand
in many industries.
3). Information on product life cycle
4) Information on the marketplace
5) Information on consumers
A MEANS TO AN END: The Profit and Revenue
Perspective

Improve the efficiency of the business including the

bottom-line profit.
Analysis of average demand
Need for “low profit” products
Guidance to where and how resources for
forecasting should be placed to maximize profit.
Without a perspective of profit versus supply given
the demand uncertainty, it would be difficult for the
forecaster to know what is important to measure,
what metric is needed, and what performance
target to shoot for.