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Steps in Demand Forecasting


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Managerial Economics - Demand Forecasting Steps

Published in: Business
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Steps in Demand Forecasting

  2. 2. Steps In Demand Forecasting • Determining Purpose for which the Forecast is used. • Subdivide Demand Forecasting Programme in small parts on the basis of Products or Sales territories or Market.
  3. 3. • Determine the factors effecting sale of the Product and their relative importance. • Select the Forecasting methods. • Study activities of the Competitors. • Prepare Preliminary sales estimates after collecting necessary data.
  4. 4. • Analyze advertisement policies, Sales Promotion plans, Personal Sales etc. • Evaluate the demand forecasting monthly, quarterly, half yearly or yearly and necessary adjustments should be done. • Prepare Final Demand Forecast on the basis of preliminary forecast and the results of evaluation.
  5. 5. CRITERIA FOR A GOOD FORECASTING METHOD • Accuracy in forecast • Plausible • Economical
  6. 6. CRITERIA FOR A GOOD FORECASTING METHOD • Quick Results • Durability • Flexibility
  7. 7. CONCLUSION A good forecasting method should be appropriate with particular demand situation, should be technically efficient economically ideal. It should be accurate, plausible, economical, quick in yielding results, durable and finally flexible.