Organizational Demand Analysis Chapter 6 Forecasting n Why

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Organizational Demand Analysis Chapter 6

Organizational Demand Analysis Chapter 6

Forecasting n Why is forecasting important?

Forecasting n Why is forecasting important?

Organizational Demand Analysis n Market Potential • “Maximum possible sales of all sellers of

Organizational Demand Analysis n Market Potential • “Maximum possible sales of all sellers of a given product in a defined market during a specific time period. ” n Sales forecast • “Maximum share of market potential an individual company might expect for a certain product or product line. ” n Example

Forecasting n Where to get information? • Internet Census bureau n Competitors n Customers

Forecasting n Where to get information? • Internet Census bureau n Competitors n Customers n • Issues

Forecasting n Potential for Planning Strategy • Forecast helps to plan: Engineering design and

Forecasting n Potential for Planning Strategy • Forecast helps to plan: Engineering design and implementation n Marketing and commercial development n External stakeholders n n Potentials: Planning and Controlling by Segment • Segment market • Allocate expenditures

Forecasting n n Life Cycle Potential Role of the Sales Forecast • What does

Forecasting n n Life Cycle Potential Role of the Sales Forecast • What does it do? n Applying Market Potential and Sales Forecast • Market potential • Sales forecast • Supply chain implications

Determining Market & Sales Potentials n Statistical Series Methods • • n Easy if

Determining Market & Sales Potentials n Statistical Series Methods • • n Easy if Example Single Series Method 1. Make sure series is related to demand for product 2. Determine the relationship 3. Estimate future values 1. 2. Independently forecasting Rely on government or industry forecasts 4. Determining market potential

Market Research n Surveys • Advantages • Disadvantages n Role of Forecasting

Market Research n Surveys • Advantages • Disadvantages n Role of Forecasting

Market Research n Forecasting Methods • Qualitative methods (AKA management judgment and subjective techniques)

Market Research n Forecasting Methods • Qualitative methods (AKA management judgment and subjective techniques) n Executive judgment • Advantages • Disadvantages n Sales force composite • Advantages • Disadvantages n Delphi method • Advantages • Disadvantages

Market Research n Forecasting Methods • Quantitative methods (systematic or objective forecasting) n Time

Market Research n Forecasting Methods • Quantitative methods (systematic or objective forecasting) n Time series • Historical data to project future • Components n Trend n Cycle n Seasonal n Irregular

Market Research n Regression or causal techniques • Determine relationship between sales and an

Market Research n Regression or causal techniques • Determine relationship between sales and an outside variable • Requirements • Limitations n Spurious relationships n Historical data n May not work n Several methods= Better accuracy