Answer to Question #219870 in Economics for Kim

Question

Demand forecasting is an important tool for predicting the demand for an organization’s products or services in a specified time period in the future” Enumerate any three needs for demand forecasting and discuss the steps involved in demand forecasting.

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Answer 1

Demand Forecasting helps an organization to reduce risks involved in business activities and make important business decisions. Apart from this, demand forecasting provides an insight into the organization's capital investment and expansion decisions.

The steps involved in demand forecasting are:

• The analyst/economist / PEO employee draws up a plan based on historical sales statistics (i.e., prepares an independent demand forecast).
• Sales managers/marketers/head of sales/designers refine the forecast of independent demand in accordance with their vision of the product, relationship with the client, the situation as a whole (i.e., they receive a forecast taking into account dependent demand).
• The assessments of different experts are brought together, a decision is made which of the assessments to take into account, the sales forecast is approved.