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Demand Forecasting Essay

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ANS 3. (a) Demand Forecasting: It is the process of predicting the future demand for an organisation’s good and services. It helps an organisation to take various business decisions, such as planning production process, managing funds, purchasing raw material.
A market is characterised by various risks and uncertainties that affect demand and sales of a product and in order to mitigate those risk, it is important to determine the future prospects of their products and services in the market.
Factors affecting the demand of rice:
1. Regionality: Region is one of the important factors that affect the demand of the product. Demand for rice depends upon the region where it is supplied to. Every place has different consumption pattern in comparison to other.
Example: In southern areas, consumption of rice is more as compare to northern …show more content…

Determining the time perspective: When the objectives are set, the demand is forecasted either for long term or short term. As in short run many determinants of demand do not change like production policies and strategies but in long run all the determinants of demand changes with time like climate and weather in case of product like rice. So, deciding the time perspective is very important

3. Making a choice of method for demand: There are several methods of demand forecasting which falls under two categories: Survey methods and Statistical methods. The survey method includes consumer survey and collecting their opinion on the product and in statistical method includes trend projection and studying the past sales data. In case of demand forecasting of rice, time series analysis, barometric and econometric methods are used as to forecast the demand.

4. Collection of data and data adjustment: The next step is to collect the data through selected method. After collecting the data, it need to be adjusted according to the requirement so that meaning conclusions can be drawn and steps should be taken to increase the demand for the

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