#16.Demand estimation/forecasting:- meaning,purpose,process,levels & methods or techniques in hindi

Описание: #16. Fundamentals of demand estimation/forecasting:- meaning, purpose, process, levels & methods or techniques
#meaning of demand forecasting and demand estimation
#purpose of demand forecasting
#process of demand forecasting
#levels of demand forecasts
#techniques aur method of demand forecasting
#techniques of forecasting

Following is the significance of Demand Forecasting:

Fulfilling objectives of the business

Preparing the budget

Taking management decision

Evaluating performance etc.

Methods & Techniques of Demand Forecasting

The choice of choosing techniques of demand forecasting is complicated because each situation might require a different method. Management should be aware of the factors favouring one method over another in a given demand-forecasting situation.

Some of the methods of demand forecasting are discussed below:

##Methods & Techniques of Demand Forecasting

Survey Methods

Under this approach, surveys are conducted about the intentions of consumers (individuals, firms or industries), opinion of experts or of markets.

When taking sample surveys, a selected subset is surveyed and through study, inferences are drawn. These methods are usually suitable for short-term forecasts due to the nature of consumers’ intentions.

A few important survey methods:

Consumer Survey Method

A firm can ask consumers, what and how much they are planning to buy at various prices of the product for the forthcoming time period, usually a year.

Collective Opinion Method

Also called sales-force polling), salesmen or experts are required to estimate expected future demand of the product in their respective territories and sections.

Delphi Method

It is also known as Reasoned Opinion. A variant of opinion poll and survey method is a Delphi method, developed by Rand Corporation of USA in the late 1940s for predicting technical changes.

Market Experiment Method

Under this method, the main determinants of the demand of a product like price, advertising, product design, packaging, quality, etc., are identified.

These factors are then varied separately over different markets or over different time periods, holding other factors constant. The effect of the experiment on consumer behaviour is studied under actual or controlled market conditions, which is used for overall forecasting purpose.

Statistical Methods

These methods make use of historical data (time series or cross-section) as a basis for extrapolating quantitative relationships to arrive at the future demand patterns and trends. The data may also be analysed through econometric models.

These are useful for long-term forecasting, for old products and for larger levels of aggregation. They are based on scientific ways of estimation, which are logical, unbiased and proved to be useful. However, the biggest disadvantage is that it is difficult to apply these methods.

Time Series Analysis

It is an arrangement of statistical data in chronological order, i.e., in accordance with its time of occurrence. It reflects the dynamic pace of steady movements of a phenomenon, over a period of time.

Regression Analysis

Regression analysis is perhaps the most popular method of forecasting among economists. It is a mathematical analysis of the average relation between two or more variables, in terms of the original units of the data.


What is demand estimation and its methods?

Demand estimation is a prediction focusing on future consumer behavior. It predicts demand for a business's products or services by applying a set of variables that show how, for example, price changes, a competitor's pricing strategy or changes in consumer income levels will affect product demand.


What is the main purpose of demand forecasting?

Demand forecasting enables an organization to take various business decisions, such as planning the production process, purchasing raw materials, managing funds, and deciding the price of the product.


What is importance of demand forecasting?

Meaning of Demand Forecasting:

Forecasting helps a firm to access the probable demand for its products and plan its production accordingly. Forecasting is an important aid in effective and efficient planning. It reduces the uncertainty and making the organization more confident of coping with the external environment.

#Levels of Demand Forecasting

Demand forecasting can be carried out at different levels. When each individual production or service organization estimate demand for their products or services, it is called micro level demand forecasting.

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