Future
is uncertain. There is great deal of uncertainty with regard to demand.
Since the demand is uncertain, production, cost, revenue, profit etc.
are also uncertain. Through forecasting it is possible to minimise the
uncertainties. Forecasting simply refers to estimating or anticipating
future events. It is an attempt to foresee the future by examining the
past. Thus demand forecasting means estimating or anticipating future
demand on the basis of past data.
In other word, Demand forecastingis the activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting
involves techniques including both informal methods, such as educated
guesses, and quantitative methods, such as the use of historical sales
data or current data from test markets.
