What Is The Significance Of Demand Forecasting?


6 Answers

Anonymous Profile
Anonymous answered
1. Helping for continuous production
2. Regular supply of commodities
3. Formulation of price policy
4. Arrangement of finance
5. Labor requirement
amber Jhon Profile
amber Jhon answered
Demand forecasting is one of the most important tools of production and operation management of a company. The objective of demand forecasting is to forecast the sales of the company in future and it helps the company in budgeting it's sales and to determine the resources which the company will require to fulfill that demand. Forecasting demand method can also help the companies to avoid oversupply and undersupply of the products. This also helps the company in inventory management and lowers the cost of the warehousing. However, the primary objective of demand forecasting is to budget the sales of the company in future and to determine the resources which the company will need.

Anonymous Profile
Anonymous answered

“Improved supply chains and demand forecasting is
essential to ensure that life saving drugs reach patients in need. The
new Artemisinin-based combination therapies (ACTs) provide a unique
opportunity to tackle unacceptable burden of malaria. In order to
manage risks and opportunities, manufacturers, procurement agencies and
donors need clarity in the medium term needs for these drugs. This
report provides a significant contribution to understanding and
mitigating the risks related to demand forecasting.”

  Dr Christopher Hentschel, President and CEO, Medicines for Malaria Venture
The dynamic of the antimalarials market has changed
significantly since the advent and scale up of ACTs in many African
countries. The issue is no longer to find a highly effective medicine,
but to ensure that these new medicines reach those who need them.
Many countries have focused initially on access through
the public sector. However, even in this environment, the challenges of
ensuring supply chain management and appropriate demand forecasting
have been significant.
These challenges will further increase as ACTs become
more widely available in the private sector - possibly with the arrival
of the proposed Affordable Medicines Facility, malaria, derived from
the Institute of Medicine’s report ‘Buying Time, Saving Lives’
Understanding the scale up in demand, and therefore
planning for implementation, has been a challenge for all stakeholders
involved in access to ACTs. National malaria control programmes need to
understand their future needs, which may not be entirely in line with
historical consumption data. Central medical stores and procurement
agencies need to understand which drug to purchase, in what quantities,
and for what delivery periods. Funders and donor agencies must foresee
sufficient long term funding. Manufacturers must plan immediate
production capacity and assess the investments required to scale up in
order to meet future demand.
Good forecasting underpins many of these decisions. In light of this, the report ‘A Risky Business’, (download the report in PDF format 1.7MB) by the Centre for Global Development
provides an analysis of the problem, and an agenda for action. Taking
the ACT example as a case study, specific recommendations have been
developed for implementation by interested parties. Among the
recommendations is the creation of an "infomediary" — a neutral third
party to collect and disseminate essential data for forecasting demand.
MMV welcomes this focus on improving demand forecasting
for the antimalarials market. It continue to play an active role in
advocating for improved demand forecasting, coordinated by those
organizations with the best expertise and capacity to manage this

Deepthi Profile
Deepthi answered
constitute the primary source of revenue for the business firm. Thus
forecasts are needed for production planning, inventory planning,
planning etc. Production requires support of men, material, machines,
which will have to be arranged. Thus man power planning, replacement;
investment planning, working capital management and financial planning
depend on sales forecasts. Thus demand forecasting is crucial for
planning. The survival and growth of business firm has to be planned,
and for
this sales forecasting is the most crucial activity. The purpose of
in general is not to provide an exact future data with perfect
precision. The
purpose is just to bring out the range of possibilities concerning the
under a given set of assumptions.
Anonymous Profile
Anonymous answered
Its a type of casting which is casted on the wall to cast a compound to cast the actors on it

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