32 recharge - Airtel FORCASTING: Most important function of managing Done to minimize risk arising out of an uncertain future which

ch can be neglected if one tries to make reasonable assumptions about the future course. Such estimation n of the future is called Forecasting

DEMAND FORECASTING: Demand forms the basis for all important managerial decisions. A demand forecast is the prediction of what will happen to your company's existing product sales. Demand forecasting is the area of predictive analytics dedicated to understanding consumer demand for goods or services. Demand forecasting involves ascertaining the expected level of demand for a particular period. It facilitates planning of production, raising of finance, setting up of a distribution network, pricing decisions, in assessing future capacity requirements, etc. The necessity arises because production of a commodity requires time and resources.

Determination of the demand forecasts is done through the following steps: Determine the use of the forecast Select the items to be forecast Determine the time horizon of the forecast Select the forecasting model

Gather the data Make the forecast Validate and implement results

FORECASTING TECHNIQUES:
There are a number of techniques available. It is decisive to use a technique that gives the most accurate forecast with the least possible cost and the minimum use of resources. Techniques range from simple to complex and from relatively inexpensive to expensive. More accurate forecast will require a complex data, more expensive and require more resources. A simple forecast will be easy to make, use readily available data and be less costly. Classified into two categories: Qualitative and Quantitative.

QUALITATIVE TECHNIQUES: This technique obtains information about the likes and dislikes.

EXPERT OPINION METHOD: This technique seeks the view of experts. Experts know the product very well as they deal with it for a long time. They have a rich experience of the behavior of demand. It minimizes individual deviation and personal biases. Delphi Method seek opinion of group of experts.

CONSUMER COMPLETE ENUMERATION SURVEY: Complete survey of all consumers. Interviews or questionnaires are used. The data is collected and added up at the total expected demand.

CONSUMER SAMPLE SURVEY Only a few consumers are selected. It is magnified to generate the total demand of all the consumers. Easily managed and less costly. Larger sampling errors.

SALES FORCE OPINION SURVEY Similar to expert opinion method. Employees of the company are asked to predict future level of demand.

CONSUMERS END USE SURVEY

QUANTITATIVE TECHNIQUES: Obtains information from the past data and extrapolating it to make forecasts of future level.