Prity katoch 1407988Prity katoch 1407988Rajwinder kaur 1407991Rajwinder kaur 1407991

MEANINGMEANING

Demand forecasting is the art of predicting Demand forecasting is the art of predicting demand for a product or a service at some demand for a product or a service at some future data on the basis of certain present future data on the basis of certain present and past behavior pattern of some related and past behavior pattern of some related events .events .

Importance of demand forecastingImportance of demand forecasting

Price controlPrice control Business planningBusiness planning Competitive strategies Competitive strategies Management decision Management decision Significance to the governmentSignificance to the government

Price controlPrice control: it is help in controlling price : it is help in controlling price by matching the output with the future by matching the output with the future expected demand.expected demand.

Business planningBusiness planning: it is based on future : it is based on future activities to be taken up.activities to be taken up.

Competitive strategiesCompetitive strategies: business to effectively : business to effectively formulate their competitive strategy in term of formulate their competitive strategy in term of manpower, finance advertising and other manpower, finance advertising and other overheads.overheads.

Management decisionManagement decision: an effective demand : an effective demand forecasting facilities the management to lake forecasting facilities the management to lake appropriate steps in factors that are pertinent to appropriate steps in factors that are pertinent to decision making.decision making.

Significance to the government: at the Significance to the government: at the macro level demand forecasting is macro level demand forecasting is valuable to the government as its aids in valuable to the government as its aids in determining target of imports as well as determining target of imports as well as exports for various product and preparing exports for various product and preparing for the international business.for the international business.

Scope of demand forecastingScope of demand forecasting

Production planningProduction planning Sale forecastingSale forecasting Control of businessControl of business Inventory controlInventory control StabilityStability Economic planning and decision makingEconomic planning and decision making

Techniques of demand forecastingTechniques of demand forecasting

Qualitative techniquesQualitative techniquesA. CONSUMER SURVEY METHODA. CONSUMER SURVEY METHOD1 Complete enumeration survey1 Complete enumeration survey2 Sample survey2 Sample survey3 End use3 End useB SALES FORCE METHODB SALES FORCE METHODC DELPHI METHODC DELPHI METHOD

QUANTITATIVE METHODQUANTITATIVE METHOD

TREND PROJECTION METHODTREND PROJECTION METHOD1 fitting trend line by observation1 fitting trend line by observation2 least square2 least square3 time series analysis3 time series analysis4 moving average4 moving average5 exponential smoothing5 exponential smoothing

BAROMETRIC METHOD BAROMETRIC METHOD REGRESSION METHODREGRESSION METHOD ECONOMETRIC METHODECONOMETRIC METHOD

QUALITATIVE TECHNIQUESQUALITATIVE TECHNIQUES

This method, the opinion of buyers, sales force This method, the opinion of buyers, sales force and experts could be gathered determine the and experts could be gathered determine the emerging trend in the market.emerging trend in the market.

CONSUMER SURVEY METHODCONSUMER SURVEY METHOD: Survey are : Survey are collect the information about future purchase collect the information about future purchase plans for the buyers of the product.plans for the buyers of the product.

Complete survey methodComplete survey method: the firm has to : the firm has to go for a door to door survey for the go for a door to door survey for the forecast period by contacting all the forecast period by contacting all the households in the area.households in the area.

Sample surveySample survey: under this method, some : under this method, some representative household are selected or representative household are selected or random basis as sample and their opinion random basis as sample and their opinion is taken as the generalized opinionis taken as the generalized opinion

END USE METHODEND USE METHOD: It also known as input : It also known as input output method. in this method the sale of output method. in this method the sale of product under consideration is projected on the product under consideration is projected on the basis of demand survey of the industries using basis of demand survey of the industries using this product as an intermediate product.this product as an intermediate product.

SALE FORCE OPINION METHODSALE FORCE OPINION METHOD: in this : in this method, instead of consumer, the opinion of method, instead of consumer, the opinion of sales man is soughtsales man is sought

SALE FORCE OPINION METHODSALE FORCE OPINION METHOD: in this : in this

method, instead of consumer, the opinion method, instead of consumer, the opinion of sales man is soughtof sales man is sought

DELPHI TECHNIQUESDELPHI TECHNIQUES : IN this method, : IN this method, instead of depending upon the opinions of instead of depending upon the opinions of buyers and salesman, can obtain views of buyers and salesman, can obtain views of the experts in their fields.the experts in their fields.

QUANTITATIVE TECHNIQUESQUANTITATIVE TECHNIQUES TREND PROJECTION METHOD:TREND PROJECTION METHOD:An old firm can use it own data of past years An old firm can use it own data of past years

regarding it sale at past years. these data also regarding it sale at past years. these data also known as time series of sales.known as time series of sales.

1 graphical method1 graphical method2 least square method2 least square method3 time series data3 time series data4 moving average method4 moving average method5 exponential smoothing5 exponential smoothing

BAROMETRIC METHODBAROMETRIC METHOD: It is a simple method. : It is a simple method. it predict directional changes quite accurately. it predict directional changes quite accurately. the analyst should establish relationship the analyst should establish relationship between the sale of product.between the sale of product.

REGRESSION METHODREGRESSION METHOD: under this method, a : under this method, a relationship is established between quantity relationship is established between quantity demanded (dependent variables) and demanded (dependent variables) and independent variables such as income, price of independent variables such as income, price of the good .the good .

ECONOMETRIC METHODECONOMETRIC METHOD::The econometric model forecasting involves The econometric model forecasting involves

estimating several simultaneous equation estimating several simultaneous equation which are generally behavioral equations which are generally behavioral equations mathematical identities and market mathematical identities and market clearing equations these technique used clearing equations these technique used sophisticated mathematical and statistical sophisticated mathematical and statistical toolstools

CASE STUDY CASE STUDY

““DEMAND PLANNING AND DEMAND PLANNING AND FORECASTING FOR A OFFICE FORECASTING FOR A OFFICE PRODUCT MAJOR”PRODUCT MAJOR”

THE CLIENTTHE CLIENT

The client id global leader in pressure sensitive The client id global leader in pressure sensitive technology, self adhesive base materials and technology, self adhesive base materials and self adhesive consumer and office products and self adhesive consumer and office products and specialized label system and ranks among the specialized label system and ranks among the fortune 500 companies, with sales of almost us$ fortune 500 companies, with sales of almost us$ 5 billion, the client is best known for its office 5 billion, the client is best known for its office automation and consumer product, reflective automation and consumer product, reflective material peel and stick postage stamps, material peel and stick postage stamps, industries labeling solutions, radio frequency industries labeling solutions, radio frequency ,identification label, label stock and related ,identification label, label stock and related service and system .service and system .

BUSINESS NEEDBUSINESS NEED FOR the client, success required managing short FOR the client, success required managing short

product lifecycles, focusing on customer service and product lifecycles, focusing on customer service and most importantly reducing supply chain costs. optimized most importantly reducing supply chain costs. optimized supply chain management is crucial for the success of supply chain management is crucial for the success of companies in this industry and a key component a companies in this industry and a key component a supply chain management is accurate forecasting and supply chain management is accurate forecasting and demand planning. The client was looking for a way to demand planning. The client was looking for a way to make its supply chain more streamlined and hence more make its supply chain more streamlined and hence more cost effective specifically the client had been looking at cost effective specifically the client had been looking at forecasting the U.S. sale for each stock keeping unit .it forecasting the U.S. sale for each stock keeping unit .it wanted to move toward planning that are based wanted to move toward planning that are based collaborative. to facilitate this, the office product division collaborative. to facilitate this, the office product division of the client had already implemented .of the client had already implemented .