Demand Forecasting

Demand Forecasting

Predicting future marked demand magnitude. On the

basis

of

statistical

data

and

empirical

measurement of functional relationship between demand and its determinants.

Demand forecasting is also the foundation of a company’s entire logistics process. It supports other planning activities such as capacity planning, inventory planning, and even overall business planning

Following Levels: ØMicro level ØIndustry level 

ØMacro level

Significance of Demand Forecasting: ØProduction Planning. ØSales forecasting. ØControl of business. ØInventory control. ØGrowth and long-term investment programmes. ØStability. ØEconomic planning and policy making.

Short-Term and Long-Term Forecasting Short-term Forecasting Purposes: ØEvolving a sales policy. ØDetermining price policy. ØEvolving a purchase policy. ØFixation of sales targets. ØDetermining Short-term Financial Planning.

Long-Term Forecasting ØBusiness Planning. ØMan power Planning. ØLong-term financial planning.

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