Want to estimate the total demand of the customers? This is better done with the help of demand forecasting. It is the process in which the sales data is developed and also estimates the expected demand in the future. In the business world, demand forecasting indicates the number of goods and services that are purchased or demanded by the customers in the future. This also analyzes the exact profit, cash flow, capital expenditure, and the other aspects depending upon the demand of the customers. However, there are many types of forecasting that are done in the organization for easy turnover and sales data collection.
Types of forecasting of demand
The forecasting that is done for the estimation and the static demand calculation is done on the basis of the level of detail. Demand is forecasted with the details of the sales that are done as well as the time span that is considered for the completion of the demand. There are various types of demand forecasting that are performed by the organization for having the analysis of the demand that is there for various products. Some of the types of forecasting are as follows that will help the organization to have better control on the sales and manufacture of the products are-
- Passive forecasting of demand-
With various conservative growth plans that are there the passive demand, the forecast is carried out by the planners for having stable businesses. However, there are simple assumptions that are carried out with the historical sales data where the minimal assumptions are used. This is the small and local business demand forecasting that is rarely done in an organization.
- Active forecasting-
This type of forecasting of the specified demand is done by the diversifying and scaling businesses. With this, there is the aggressive growth of the organization that is leading in the market. The plans and the demand are made in terms of marketing activities and product portfolio expansion.
- Short term forecasting-
This forecasting is done on the basis of the short term period of the demand forecasting. However, this analysis is done for the short term demand for the products that the organization is producing. This also has the customer demand consideration that is essential in the growth of the organization.
- macro-level External demand forecasting-
This forecast is performed by seeing the external economical environment which deals along the broader market. External strategies and the demands are carried out of the objectives of the business. Therefore, with the help of this forecasting the businesses and use the strategies and rules for the growth of the activities and goals of the organization.
Thus, these are the types of demand forecasting that are done by the organizations to have the analysis of the demand and supply of the products that they are manufacturing. Therefore, the forecasting of the demand of the customers is necessary for the organization. This is the way by which you can plan and manage the demands that are placed by the customers.