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Managerial Economics Assignment on Demand Forecasting

Sweta Dubey
141354

ACC Cement (Grey Cement)

S.No | Year | Sales (Rs) | Demand | Price/Unit | Ultratech Price/Unit | Population | Per Capita Income | | | | | P | Ps | Po | PCI | | | | | | | | | 1 | 2012 | 99120000000 | 26540000000 | 4.252799588 | 626000 | 121 | 60420 | 2 | 2011 | 91776100000 | 23307000000 | 4.37362276 | 653091 | 119.05 | 53000 | 3 | 2010 | 75223100000 | 20984000000 | 3.536083298 | 562592 | 117.4 | 45492 | 4 | 2009 | 78287300000 | 21273000000 | 3.781629794 | 696594 | 115.8 | 40605 | 5 | 2008 | 70488500000 | 20702000000 | 3.617020731 | 563648 | 114.2 | 35820 | 6 | 2007 | 63835900000 | 19488000000 | 3.414770282 | 493385 | 112.6 | 31198 | 7 | 2006 | 53106900000 | 18357000000 | 2.893005393 | 384952 | 111 | 27123 | 8 | 2005 | 30535800000 | 12629000000 | 2.417911157 | 590513 | 109 | 24143 | 9 | 2004 | 26711100000 | 14428000000 | 1.851337677 | 432875 | 107 | 22669 | 10 | 2013 | | | 4.452681169 | 655422 | 123.057 | 63259.74 |

D=Ao+A1*P+A2*Ps+A3*Po+A4*PCI

D=26615296860 (Forecasted Demand) Elasticity | Forecasted E | Demand raised by20% | E1 | 0.563497541 | 0.470913537 | E2 | -0.304305339 | -0.254307238 | E3 | -0.356545968 | -0.297964606 | E4 | 0.473868535 | 0.396010793 | | |
D = 31848000000 (Demand increased by 20%) | Coefficients | Intercept | 16594244505 | P(A1) | 3368230007 | P(A2) | -12357.19418 | P(A3) | -77115294.39 | P(A4) | 199370.9069 |

E = A*(P/D)

* Substitutes is Ultratech Cement. * GDP rise of India 4.7 in 2013. * Population hike by 1.7%

Factors affecting Elasticity * Population growth * Per Capita Income * Substituent product * Price of the product

When we talk about cement, an essential product, it is required no matter what for today’s infrastructure development of the nation and the demand forecasting and elasticity analysis shows that all the factors like growth, PCI etc. are not affecting the price of the product by that extent. The values of the elasticity are less than one, that proves the inference.

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