In order for a business to be run efficiently, demand forecasts are formulated to calculate the likely demand for the product that will be sold in the future. Although no predictions are 100% accurate, both statistical methods (such as trend projection method and regression analysis) or survey methods (such as survey of buyer’s intentions and simulated market situation) are used to calculate the market’s potential demand. These are both techniques that analysts use alternately to generate a demand forecast with the best accuracy, plausibility, durability, and relevance to the economy. Forecasting is helpful in aiding the regulation of inventory supply, the formulation of prices for goods, labour requirement, and overall help for continuous production. This allows business’s to better calculate their potential earnings, so they can allocate their budgets effectively account for potential gains and losses, which in turn enables them to maximize business efficiency. I believe that demand forecasting is a very vital part in keeping a business efficiently running, and these forecasts especially effect budget allocating for marketing. These forecasts display who is buying what good, and this illustrates who should be targeted in the advertising and when promotions should be created to attract that target market.
Interviews displaying importance of demand forecasting:
https://www.youtube.com/watch?v=fY0V1tKW5jo&feature=related
https://www.youtube.com/watch?v=H0HBlGwcEQk&NR=1
