DEMAND FORECASTING A forecast is a prediction or estimation of future situation. It is an objective assessment of future course of action. Since future is uncertain, no forecast can be per cent correct. Forecasts can be both physical as well as financial in nature. The more realistic the forecasts, the more effective decisions can be taken for tomorrow.

definition According to Cundiff and Still, “ Demand forecasting is an estimate of sales during a specified future period which is tied to a proposed marketing plan and which assumes a particular set of uncontrollable and competitive forces”.

Types of demand forecasting Non-durable consumer goods – food, milk, medicine, fruits Durable consumer goods – car, T.V. furniture Forecasting demand for capital goods - machinery

Forecasting the demand for consumer durables Population changes Buying power Income (per capita income) The number and age Consumer attitude and demand

Forecasting techniques i.Opinion polling method Consumer’s survey Sample survey Experts methods  Statistical method Trend projection method Graphical method

Criteria of a good forecasting method Accuracy Flexibility Availability Simplicity Should not be too costly stability

Qualitative forecasting Surveys and opinion polls are used to make short- term forecasts when qualitative data are not available. These qualitative techniques can also be very useful for supplementary qualitative forecasts which anticipate changes in consumer tastes or business expectations about future economic conditions. Survey techniques – houses, washing machine, furniture T.V. Opinion polls – economic activity. Consumers goods