Question

3. Demand forecasting in an organisations plays a vital role in business organisations

It provides reasonable data for the organization's capital investment and expansion decision.

a. Keeping the above statement in consideration. Discuss the various steps involved in demand forecasting (5 Marks)

b. Discuss the various needs for demand forecasting in business organisations?

Answer 1

hello!

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b)

• Demand is the most important aspect for business for achieving its objectives. Many decisions of business depend on demand like production, sales, staff requirement, etc. Forecasting is the necessity of business at an international level as well as domestic level.

A)

There are two types of forecasting:

Based on Economy

Based on the time period

1. Based on Economy

There are three types of forecasting based on the economy:

Macro-level forecasting:-

• It deals with the general economic environment relating to the economy as measured by the Index of Industrial Production national income and general level of employment, etc.

Industry level forecasting:-

• Industry level forecasting deals with the demand for the industry’s products as a whole. For example demand for cement in India, demand for clothes in India, etc.

Firm-level forecasting:-

• It means forecasting the demand for a particular firm’s product. For example, demand for Birla cement, demand for Raymond clothes, etc.

2. Based on the Time Period

Forecasting based on time may be short-term forecasting and long-term forecasting

Short-term forecasting:-

• It covers a short period of time, depending upon the nature of the industry. It is done generally for six months or less than one year. Short-term forecasting is generally useful in tactical decisions.

Long-term forecasting casting:-

• Long-term forecasts are for a longer period of time say, two to five years or more. It gives information for major strategic decisions of the firm. For example, expansion of plant capacity, opening a new unit of business, etc.

Answer 2

Answer:

Explanation:

Demand is the most important aspect for business for achieving its objectives. Many decisions of business depend on demand like production, sales, staff requirement, etc. Forecasting is the necessity of business at an international level as well as domestic leve