Question

Demand forecasting in organisations plays a vital role in business organizations 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

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

Answer 1

Demand forecasting

Explanation:

Answer b) Following are the various needs for demand forecasting in business organization,

• It is needed because that helps the firm to be aware of their probable demand. They will know what demand stands for what product or what service and thus will be able to predict the likelihood of what will get more sold.
• It can help the organization to plan its production properly. This would minimize costs when you know what to focus on.
• Its one step closer to efficient planning.
• It reduces the uncertainty and the business will have a better opportunity at coping with the external environment.

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Answer 2

The various steps involved in demand forecasting Explanation:

• Identifying the objective: The objective for the demand forecasting should be defined whether short term or long term.
• Determine the time perspective: The time period for the demand forecasting has to be determined either for short period or long period.
• Deciding the method of demand forecasting: There are many methods of demand forecasting under the survey and statistical methods.
• Collection of data: We have to decide whether we have to collect data either on primary or secondary data.
• Interpretation of result: After estimation the demand for predefined period results are interpreted.

b)  It helps in expanding the organization when the demand for the product is higher and fulfilling the objectives.

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Discuss the various steps involved in demand forecasting

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