Question

Explain how study of correlation helps in forecasting the demand of product

Answer 1

Explanation:

The main challenge to forecast demand is to select an effective technique.

There is no particular method that enables organizations to anticipate risks and uncertainties in future. Generally, there are two approaches to demand forecasting.

The first approach involves forecasting demand by collecting information regarding the buying behavior of consumers from experts or through conducting surveys. On the other hand, the second method is to forecast demand by using the past data through statistical techniques.

Answer 2

The use of correlation for forecasting the demand of product establishes a relationship.

Explanation:

• The correlation describes the degree of association to which the two variables such as the sales and advertising are related.

• The dependent variable can then be forecasted based on their estimated equation for the given values of the independent variable.

• A positive correlation improves the forecasting performance and this upwards and downwards shaped design that correlation creates leads to the formation of the forecasts that tell us about the underlying case of relationships.

• Being a scientific method tells whether the new product would be a success in the market or whether a failure.

Learn more about the how study of correlation helps in forecasting the demand of product.

• brainly.in/question/13256226 answered by Tahira007.