Deamed forecasting

Demand
Forecasting

, Demand Forecasting
• Forecasting simply refers to estimating or anticipating futu
events.
• Forecasting is the prediction of future events on the basis
historical data, opinions, trends, or known future variables
• Thus demand forecasting means estimating or anticipati
future demand on the basis of past data.
• According to Evan J. Douglas, "Demand forecasting is t
process of finding values for demand in future time period
• In short, demand forecasting means anticipating the futu
demand

, Role and Importance of Deman
Forecasting
• It enables a firm to produce the required quantities at the rig
and arrange well in advance for the factors of production. Thi
to avoid the possibilities of over-production and under-produ
• It helps in formulating an appropriate pricing policy becau
price is determined on the başis of expected demand.
• It helps in discovering new marketing opportunities.
• It is the base for marketing planning. Without the knowle
future expected demand, it is not possible to prepare
marketing programme.
• It reduces the business risks.
• It helps in reducing the cost of purchasing and inventory.