What is demand forecasting? Why is it so important in the management of business firms and other enterprises? Can you also mention few methods of forecasting..??
2007-02-27 04:52:48 · 4 answers · asked by Tan 2 in Social Science ➔ Economics
It is forecasting the market conditions for the particular goods or services. It is essential to know the demand to maximize profits and optimize production.
2007-02-28 03:28:24 · answer #1 · answered by Erdene A 2 · 0⤊ 0⤋
Importance Of Demand Forecasting
2016-11-02 23:29:14 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Understanding customer demand is key to any manufacturer to make and keep sufficient inventory so customer orders can be correctly met. The discipline that helps a supply chain forecast and plan better is called as demand planning.
Accurate and timely demand plans are a vital component of an effective supply chain. Inaccurate demand forecasts typically would result in supply imbalances. Although revenue forecast accuracy is important for corporate plannig, forecast accuracy at the SKU level is critical for proper allocation of resources. For a detailed discussion on the discipline of demand planning and the several approaches adopted by best-in-class customers, see http://www.DemandPlanning.net
2007-02-27 05:05:51 · answer #3 · answered by Giggly Giraffe 7 · 0⤊ 0⤋
Businesses need to forcast the demand of their product so they know how many of them to produce. If you produce too few product you loose out on profit and if you produce too much product you spend all of your profit making items you cant sell. For instance ford wants to make enough pickups so everyone that wants one can get one but not so many that every dealer lot in the country has 50 of them left over at the end of the year that they can't sell. So basically they need to forcast the demand.
2007-02-27 05:10:07 · answer #4 · answered by eric 1 · 0⤊ 0⤋