Demand For Casting

PROJECT DEMAND FORECASTING BY MARUTI SUZUKI

SUBMITTED BY: AMIT KUMAR-911 AYUSHI SHARMA-921 CHAMAN RAI-925 NEHA AGARWAL-946

DEMAND FORECASTING Demand Forecasting is the activity of estimating the quantity of a product or service that consumers will purchase.

Why demand forecasting is done     

Purchasing required amount of raw materials. Determining appropriate price policy Setting sales targets and establishing controls and incentives. Evolving a suitable advertising and promotional campaign. Forecasting short term financial requirements.

Contd… Planning of a new unit or expansion of an existing unit.  Planning long term financial requirements.  Planning man-power requirements.  Appropriate production scheduling. 

Factors affecting demand forecasting

1. Geography -Different states: People have different choice for different models, so accordingly demand is forecasted keeping in mind the interest of the customers for eg. Maruti swift was not successful in uttar pradesh because of it’s shape,where as in other states it was a big success.

contd…. Even factors like colour play an important role in influencing demand.People in South India avoid black colour cars whereas in North India it is demanded.

Contd.. 2. Time Period -festive seasons -marriage season -seasonal factors

3. Product level: Different

variants of a car have different demands for eg. People who travel more, prefer diesel models of different cars over the petrol version

Contd. 4. Economic environment:

various factors such as GDP, inflation and deflation play an important role.

5. Market share

Demand forecasting techniques  Survey of buyers intentions  Hunch

method or Expert opinion  Delphi method  Naïve model  Controlled experiments  Judgemental approach  Economic indicators  Analysis of time series and trend projection  Smoothing techniques

How demand forecasting is done by Maruti

Survey of buyer’s intentions -gives an insight into what customer’s want and have the willingness to buy -respondents may not give realistic and rational responses.

SURVEY IS DONE TO……  To

estimate what proportion of the population will ultimately buy their car, they estimate what proportion of the population:  1. wants to buy a car  2. has the income to pay  3. is interested in buying the car which the company has for sale.

Hunch method/Expert opinion 

Involves field experts like Dealers

-Provide information regarding different enquiries made by people about different cars. (conversion rate- 20%) -maintain database of past customers -number of car booked in advance Based on these send a demand for cars to Maruti Suzuki.

EXPERT OPINION  Maruti

gathers information from industry experts about where the market is headed  advantage of this method is that the information comes from the sources most involved with the market

PAST SALES ANALYSIS  It

is done by colllecting the past sales recorded in different region by Maruti all over india. - different statistical analytical test are performed to forecast the demand for future.

POS SYSTEM Maruti uses a software called POS(Point on sale) system. -It contains all the database maintained by Maruti. -with the help of this software they forecast demand.

FINALLY……… Demand forecasted using past sales

analysis and survey done by Maruti are compared with demand forecasted by dealers from all over India.

-If the demand forecasted varies by 5-10% more or less, production is carried out accordingly. If variation is large, estimation is reconsidered.