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Demand Forecasting Techniques For Service Sector: Presented By: DHANRAJ KUMAWAT (2021109)

Demand forecasting is used to predict future customer demand for products and services. It helps businesses make better supply decisions by estimating total sales and revenue. There are several techniques for demand forecasting in the service sector, including consumer surveys, opinion methods, and statistical methods. Consumer survey methods directly ask consumers about future plans, while opinion methods collect expert opinions. Statistical methods use historical data in trends, indicators, or econometric models to forecast long-term demand scientifically and reliably. For example, cash demand forecasting in ATMs can use time series regression models to accurately predict needs and minimize costs from under- or over-filling machines.

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84 views12 pages

Demand Forecasting Techniques For Service Sector: Presented By: DHANRAJ KUMAWAT (2021109)

Demand forecasting is used to predict future customer demand for products and services. It helps businesses make better supply decisions by estimating total sales and revenue. There are several techniques for demand forecasting in the service sector, including consumer surveys, opinion methods, and statistical methods. Consumer survey methods directly ask consumers about future plans, while opinion methods collect expert opinions. Statistical methods use historical data in trends, indicators, or econometric models to forecast long-term demand scientifically and reliably. For example, cash demand forecasting in ATMs can use time series regression models to accurately predict needs and minimize costs from under- or over-filling machines.

Uploaded by

Dhanraj Kumawat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

Demand Forecasting Techniques for

Service Sector

PRESENTED BY :
DHANRAJ KUMAWAT (2021109)
What is demand forecasting

Demand forecasting is the process of using predictive


analysis of historical data to estimate and predict customers'
future demand for a product or service.
Demand forecasting helps the business make better-
informed supply decisions that estimate the total sales and
revenue for a future period of time.
1. CONSUMER SURVEY METHOD

It uses the direct approach to demand forecasting by directly asking


the consumers about their future consumption plan.

Consumer
survey method

Complete
enumeration Sample survey End use method
survey
i) Complete enumeration survey
In this, the consumers are asked about their future plans of purchasing the
product in question. The quantities indicated by them are added to obtain the
total demand.
ii) Sample survey
Under this only a few customers are selected from relevant market through
a sampling method, then demand is added to get the final demandIt gives
good results when applied carefully especially for new products and brands.
iii) End use method
It focus on the demand survey of industries using this product as an
intermediate product. Demand for the intermediate product is end-use demand
in the production of final product.
2. Opinion methods

Opinion poll methods aims at collecting opinion from those who are
supposed to possess knowledge of market e.g. Sales representatives,
sales executives, professional marketing experts

Opinion
methods

Export Market
Delphi
opinion studies and
method
method Experiment
2. Statistical Methods

This method uses historical for estimating long term demand.


It is considered superior than any other techniques due to following
reasons:
 Method of estimation is scientific
 Estimates are relatively more reliable
 It involves small cost
i)Trend projection method
 Itis concerned with movements of variables through time, it uses
long and reliable time series data. It is based on the assumption that
factors responsible for past trends in the variable to be projected as
they will continue to play their part in future in same way.
ii) Barometric method
 The technique is to construct an index of economic indicator and to
forecast future trend on the basis of movement in the index of
economic indicator.
iii) Econometric method
 It combines statistical tools with economic theories for forecasting. It
is widely used for a product, for a group of product or for the
economy as a whole.
iii) Econometric method
 It combines statistical tools with economic theories for forecasting. It
is widely used for a product, for a group of product or for the
economy as a whole.

Econometric
method

Simultaneous
Regression method
equation method
Cash Demand Forecasting of ATMs: Time Series Regression Model

 Cash demand in ATMs require accurate prediction which is no


different than in other vending machines
 If the forecast is wrong, it induces a considerable amount of costs.
 In the case of high forecast and high unused cash stored in the ATM
incur costs to the bank. The bank pays different re-filling costs
depending on its policy with the money transportation company.
 Banks normally pay a significant amount of fixed fees for the
refilling, additional extra cost for the transportation with security
arrangement.
 ATMs should not be filled with large amounts of cash which
may bring low transport/logistics cost but high freezing & high
insurance costs.
 On the other hand, if banks do not have the proper mechanism
to track the usage pattern, then frequent re-filling ATMs will
reduce freezing and insurance cost but increase logistics cost.
 The daily cash withdrawal amounts are time series.
 Therefore, in this typical cash demand forecast model we can
use regression machine learning models to troubleshoot the
above case.
Thank You

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