Question : Demand Projections

Year Population Companies

(PMC + with Hotel Rooms Studio Apptt rooms
PCMC) in Turnover of
Lacs Rs 100 cr 5 star 4star 3star others Total Occupan No of Occupanc Price per
plus cy -3 & 4 Rooms y of apt.
star Studio
rooms Aptt.

20x1 48 250 100 300 700 3000 4100 60% 30 65% 1200
20x2 49 270 120 320 750 3200 4390 58% 35 67% 1300
20x3 52 280 140 350 810 3300 4600 59% 40 68% 1500
20x4 54 310 165 370 850 3460 4845 61% 60 70% 1600
20x5 55 370 180 410 880 3500 4970 63% 80 72% 1800
20x6 57 410 210 430 930 3670 5240 68% 100 78% 2000
20x7 60 490 225 460 970 3850 5505 72% 130 79% 2200
20x8 65 535 260 470 1080 4050 5860 75% ?? 2300
20x9 68 570 280 510 1140 4250 6180 76% ?? 2400
2ox0 71 610 310 550 1190 4380 6430 77% ?? 2500

Required : To find out what could be demand during year 20x8, 20x9, 20x0
Solution : Market Demand Forecasting

Solution
Yr Population Companies
( PMC + with Turnover Hotel Rooms Studio Aprtment rooms
PCMC ) of Rs 100 Cr
plus
4star 3star Occupancy Total Room No of Occupanc Room Days for
Days rooms y - Studio Studio apt
Aptt.

20x1 48 250 300 700 60% 219000 30 65% 7118

20x2 49 270 320 750 58% 226519 35 67% 8559
20x3 52 280 350 810 59% 249806 40 68% 9928
20x4 54 310 370 850 61% 271633 60 70% 15330
20x5 55 370 410 880 63% 296636 80 72% 21024
20x6 57 410 430 930 68% 337552 100 78% 28470
20x7 60 490 460 970 72% 375804 130 79% 37486
20x8 65 535 470 1080 75% 424313 ??
20x9 68 570 510 1140 76% 457710 ??
2010 71 610 550 1190 77% 489027 ??

Least Square Method

Yr 3&4 star rooms Studio Room days

X Y XY X square
1 219000 7117.5 1558732500 47961000000
2 226519 8559 1938832750.75 51310857361
3 249806 9928 2480073968 62403037636
4 271633 15330 4164133890 73784486689
5 296636 21024 6236464752 87992619860.25
6 337552 28470 9610105440 113941352704
7 375804 37486 14087200842 141228646416
8 424313 ??

Summ 1976950 127914 40075544142.75 5.78622E+11

Avg 282421 18273

b 0.1947 27648796419 142024679114

 a -36707 18273 54981

y a b X
f 20x8 -36707 0.1947 424313
45896

Simple Moving average ( 4 yrs )

f5 10234
f6 13710
f7 18688
f8 25577
Weighted moving averages
7118 0 0
8559 0 0
9928 0 0
15330 0 0
21024 0.1 2102
28470 0.2 5694
37486 0.7 26240
f8 34036

Exponential smoothening D(t+1) = mDta + (1-m)xDtf

(Actual demand and actual
Deriving Mue by observing closeness with actuall forecasts
forecast)
actually
Yr Demand Demand Demand
Forecasted Mue Mue
Actual (Dta) beginning of Forecast (Dft) Forecast (Dft)
year 0.8 0.9
1 7118 7900 7900 7900 0 0
2 8559 7250 7274 7196 -24 54
3 9928 8200 8302 8431 -102 -231
4 15330 9700 9603 9765 97 -65
5 21024 14500 14185 14757 315 -257
6 28470 19200 19656 20340 -456 -1140
7 37486 26200 26707 27589 -507 -1389
8 35330 36408 -677 -3028

Chain ratio

Business Houses 535

No of Visitors per year per company 500 ( Assumed )
Total visitors with avg stay more than 15 days 15% ( Assumed )
Room Days 40125
Tourist & Others ( ..% of Business Req.) 15% ( Assumed )
Room Days 6018.75
46143.75

End Use Method

Business Requirement Avg no of room Room Days
Groups days
A 100 100 10000
B 150 75 11250
 C 240 50 12000
Total 490 33250 Room days

Consumption level

yr Room Days 3&4 star room Price per room Business Elasticty 3&4 Elasticity Elasticity
for Studio apt day Houses Star room days of price Business
Houses

1 7118 219000 1200 250 Elasticity >> 2.549 2.871 1.538

2 8559 226519 1300 270 Forecast 20x8 49820 42377 42779
3 9928 249806 1500 280
4 15330 271633 1600 310
5 21024 296636 1800 370 ((srd7-srd6)/(srd7+srd6))*((34s 7+ 34s6)/(34s7-34s6))
6 28470 337552 2000 410 srd7*(1+(srd8-srd7)/srd7xErd)
7 37486 375804 2200 490
8 ?? 424313 2300 535
9 457710 2400 570
10 489027 2500 610
oms

Price Rs/
Day

1200
1300
1500
1600
1800
2000
2200
2300
2400
2500
Summary : forecast for year 20x8.

Least Sq 45896
Simple Avg. 25577
Wted Avg. 34036
Exponential Smoothening 35330
Chian ratio 46144
End use method 33250
Consumpmtion level 3&4 star hotel rooms 49820
Price elasticity 42377
Business Houses 42779
Average 39468