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Methods of Demand Forecasting

In: Business and Management

Submitted By tanvirtalha
Words 2994
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Broadly speaking, there are two approaches to demand forecasting. Survey method and Statistical method are further sub-divided into various methods.

The former obtains information about the consumers’ intentions by conducting consumers’ interviews, through collecting experts’ opinions. The later using past experience as a guide and by extrapolating past statistical- relationships suggests the level of future demand. Survey methods are found appropriate for short term forecasting or demand estimation, while statistical methods are more suitable for long term demand forecasting or business and economic forecasting. Either of the methods may be used for forecasting demand for existing products, but the demand for new products, in the absence of any historical data, must be forecast through the survey method only. Under survey methods surveys are conducted about the consumers’ intentions, opinions of experts, survey of managerial plans, or of markets. Data obtained through these methods are analyzed, and forecasts on demand are made. These methods are generally used to make short-run forecast of demand.
Survey methods are further sub-divided in to:
Consumers’ Survey and Experts’ Opinion and
Survey of Managerial Plans.
A. Consumers’ Survey:
Consumers’ survey involves direct interview of the potential consumers who are contacted by the interviewer and asked how much they would be willing to buy a given product at different prices. Consumers’ survey may take any form as:
Complete Enumeration
Sample Survey, or End-Use Method
1. Complete Enumeration Method:
In complete enumeration survey, all the consumers of the product are contacted and asked to indicate their plans to purchasing the production in question for the forecast period. The demand forecast for the total census consumption is obtained simply by adding the intended demand of all...

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