Demand forecasting

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Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase in future. Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets. Demand forecasting may be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market Demand forecasting is predicting future demand for the product. In other words it refers to the prediction of probable demand for a product or a service on the basis of the past events and prevailng trends in the present.

Methods that rely on qualitative assessment[edit]

Forecasting demand based on expert opinion. Some of the types in this method are,

Methods that rely on quantitative data[edit]

Some of the other methods[edit]

a) time series projection methods this includes:

  • moving average method
  • exponential smoothing method
  • trend projection methods

b) casual methods this includes:

  • chain-ratio method
  • consumption level method
  • end use method

See also[edit]