Objective

1.Helping in deciding the number of salesmen required to achieve the sales

Demand forecasting will help to analyze the future demand and hire the salesman to sale it's products

2.Determination of sales territories.

Demand forecasting helps to analyze the potential area for the demand of the products and it's sale

3.To determine how much production capacity to be built up.

Demand Forecasting help to know the future demand and helps to maintain the inventory to avoid
shortage

4. Determining the pricing strategy.

Price of product are determined by the market demand and supply equalibrium . Demand forecasting
Will help to know the demand Of the product to set the pricing policy.

5.To decide to enter a new market or not.

Demand forecasting Will help to know the sales volume of the product in new market to analyze The
profit..

6.To decide the promotional mix.

Demand forecasting Will help to decide the strength of the customer and it's preference and let's us
decide the suitable promotion strategy ( T. V add, Newspaper add or hording board?)
1.Short-term objectives:

Formulating production policy

It help to determine when to produce and how much to produce

Formulating price policy

It help to set the price of the product according to the demand And supply of the product In the market

Controlling sales

Demand forecasting helps to control the sales by analyzing the demand to avoid unnecessary supply of
products

Arranging finance

Demand forecasting aims to arrange the funds for the production according to the demand of the
market

2.Long-term objectives:

Deciding the production capacity

Demand forecasting Will help to decide the production target to avoid unnecessary stock handling cost
and to effectively utilization of money..

Planning long-term activities

Demand forecasting Also helps to plan for long term activities such as to increase in production capacity,
Human resources planning and etc
Steps involved in demand forecasting

1 Identification of human objectives.

We must determine the objective behind the demand Forecasting

2.Determining the nature of goods under consideration.

We must determine the product or nature of goods whose demand is going to predicted.

3.Selecting a proper method of forecasting.

For demand Forecasting Convenient method should be used to easily access the information from the
market and customer

4.Interpretation of result

After the data collection, it should be analyzed it get meaningful results from the available information

Demand forecasting techniques:

1 .Opinion polling method

Collective opinion survey

Refers to a method in which experts are requested to provide their opinion about the product. Generally,
in an organization, sales representatives act as experts who can assess the demand for the product in
different areas, regions, or cities.

Survey by customers intention

customer intention survey is to understand the motivation and thought process of a customer while
buying certain products and service..

Delphi method

Refers to a group decision-making technique of forecasting demand. In this method, questions are
individually asked from a group of experts to obtain their opinions on demand for products in future.

Nominal group method

The nominal group technique is a group process involving problem identification, solution generation
and decision making. It can be used in groups of many sizes, who want to make their decision quickly, as
by a vote..

2. Statistical methods

Trend projection method

Trend projection or least square method is the classical method of business forecasting. In this method, a
large amount of reliable data is required for forecasting demand.

Regression analysis

In regression method, the demand function for a product is estimated where demand is dependent
variable and variables that determine the demand are independent variable.

By Dipesh Kumar ( MBA)