demand forecasting

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Name: zeeshan safdar Topic: Demand Forecasting

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Meaning of Demand Forecasting Demand forecasting is the scientific and analytical estimation of demand for a product (service) for a particular period of time. It is the process of determining how much of what products is needed when and where .

Elements of a Good Forecast:

Elements of a Good Forecast Timely Accurate Reliable Meaningful Written Easy to use

Criteria for a good forecasting:

Criteria for a good forecasting Accuracy Simplicity Economy Availability Durability

Techniques of Demand Forecasting:

Techniques of Demand Forecasting Subjective (Qualitative) methods : rely on human judgment and opinion. Buyers’ Opinion Sales Force Composite Market Simulation Test Marketing Experts’ Opinion

Techniques of Demand Forecasting:

Techniques of Demand Forecasting Quantitative methods : use mathematical or simulation models based on historical demand or relationships between variables. Trend Projection Smoothing Techniques Barometric techniques Econometric techniques

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Subjective Methods of Demand Forecasting Consumers’ Opinion Survey Buyers are asked about future buying intentions of products, brand preferences and quantities of purchase, response to an increase in the price, or comparison with competitor’s products. Census Method : Involves contacting each and every buyer Sample Method : Involves only representative sample of buyers

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Subjective Methods of Demand Forecasting Opinion Survey Salespersons are in direct contact with the customers. Salespersons are asked about estimated sales targets in their respective sales territories in a given period of time. Contd…

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Subjective Methods of Demand Forecasting T est Marketing Involves real markets in which consumers actually buy a product without the consciousness of being observed. product is actually sold in certain segments of the market, regarded as the “test market”. Choice and number of test market(s) and duration of test are very crucial to the success of the results. Contd….

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Quantitative Methods of Demand Forecasting Trend Projection Statistical tool to predict future values of a variable on the basis of time series data. Time series data are composed of: Secular trend (T): change occurring consistently over a long time and is relatively smooth in its path. Seasonal trend (S): seasonal variations of the data within a year Cyclical trend (C ): cyclical movement in the demand for a product that may have a tendency to recur in a few years

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Quantitative Methods : Barometric Techniques Barometric Technique alerts businesses to changes in the overall economic conditions. Helps in predicting future trends on the basis of index of relevant economic indicators especially when the past data do not show a clear tendency of movement in a particular direction. Contd….

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Limitations of Demand Forecasting Change in Fashion Consumers’ Psychology Lack of Past Data Uneconomica l Lack of Experienced Experts

practical study of :

practical study of


INTRODUCTION: Engro Foods' Started their foods business in 2006 with the launch of Olper's, Highly passionate about providing millions of people across the length and breadth of Pakistan with the ultimate brand experience Engro Foods is among the biggest and fastest growing business in Pakistan with a vision to cater to local needs with products conforming to global standards.

Products of ENGRO FOODS:



FORECASTING TECHNIQUES IN ENGRO FOODS A combination of three forecasting methods is used. The methods are used in combination for the purpose of sales and demand forecasting:-

Qualitative Method :

Qualitative Method Using historical data and market intelligence as a guide, ENGRO FOODS management practices their own judgment to determine the demand forecast. A yearly demand plan is forecasted in this way which is then further divided into monthly, weekly and daily plans accordingly.

Causal Method :

Causal Method Causal forecasting assumes that the demand forecast is highly correlated with certain factors in the environment such as the state of the economy, interest rates, and product pricing that can cause a change in the demand. An example is how by introducing a product variant, such as TARANG, can influence demand for the original product that is OLPERS.

Opinion Poll Method:

Opinion Poll Method ENGRO FOODS collects opinions of those who are supposed to possess the knowledge of the market like sales representatives, sales executives, consultants and professional marketing experts. In this way demand and sale forecasting is done in ENGRO FOODS .


CONCLUSION & RECOMMENDATIONS Demand forecasting is the scientific and analytical estimation of demand for a product (service) for a particular period of time. The engro foods used the opinion poll method, qualitative method and casual method for their forecasting of demand in the market. They should use the trend and smoothing techniques for the accurate and long term forecasting.

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