Demand forecasting

Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets. Demand forecasting may be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market.

Methods that rely on qualitative assessment

Forecasting demand based on expert opinion. Some of the types in this method are,

• Unaided judgment
• Prediction market
• Delphi technique
• Game theory
• Judgmental bootstrapping
• Simulated interaction
• Intentions and expectations surveys
• Conjoint analysis
• jury of executive method

Methods that rely on quantitative data

• Discrete Event Simulation
• Extrapolation
• Group method of data handling (GMDH)
• Reference class forecasting
• Quantitative analogies
• Rule-based forecasting
• Neural networks
• Data mining
• Causal models
• Segmentation

Some of the other methods

a) time series projection methods this includes:

• moving average method
• exponential smoothing method
• trend projection methods

b) casual methods this includes:

• chain-ratio method
• consumption level method
• end use method

See also

• Supply and demand
• Demand chain
• Calculating demand forecast accuracy
• Inventory § Principle of inventory proportionality
• Reference class forecasting

References