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Steps Involved in Demand Forecasting – 10 Major Steps in Detail | Economics

Steps Involved in Demand Forecasting

Steps Involved in Demand Forecasting

A demand forecast is an essential tool used to make effective decisions, allocate resources, plan production, and manage inventory by estimating future demand for products or services.

By forecasting demand accurately, businesses can optimize their operations, lower costs, and increase customer satisfaction. In this detailed explanation, we’ll look at the steps involved:

Steps in Demand Forecasting

1. Data Collection:

➡ Data collection is the foundational step of demand forecasting. It involves gathering historical data from various sources, including sales records, customer orders, point-of-sale systems, and market research.

➡ A company’s forecasting models will be more accurate and comprehensive if it considers external factors, such as demographic trends and economic indicators.

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