Answer to Question #211557 in Management for Nachiket Pawar

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.

Answer 1

Demand forecasting is the process of using predictive analysis of historical data to estimate and predict customers' future demand for a product or service. Demand forecasting is needed in an organization since it helps the business make better-informed supply decisions that estimate the total sales and revenue for a future period of time. In this case, it helps to prepare budget, which reduces risks and make efficient financial decisions that impact profit margins, cash flow, allocation of resources, opportunities for expansion, inventory accounting, operating costs, staffing, and overall spend. All strategic and operational plans are formulated around forecasting demand. It also helps in planning and scheduling production