Answer to Question #226563 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.

"LONG ANSWER"

Answer 1

Needs for Demand Forecasting

Decision Making

Demand forecasting plays a critical role in crucial decision making in the organization.

Mitigating Risks

Demand forecasting helps an organization to know the risks that can affect the organization in future as well as come up with mitigating factors to cumb such risks (Chase, 2013).

Improves Planning

Forecasting demand helps organizations to better plan their activities.

Steps Involved in Demand Forecasting

Identifying Objectives

This involves choosing the forecast type.

Identifying nature of market and product

The product and nature of market is identified.

Demand determinants

The factors that affect demand are determined.

Factors analysis

The factors that affect demand are analyzed.

 

Method of choice

The method that will be used to forecast demand will be chosen.

Accuracy Testing

The accuracy of the forecasted demand is determined.

 

References

Chase, C.W., 2013. Demand-driven forecasting: a structured approach to forecasting. John Wiley & Sons.