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Types of Demand Forecasting

There are three types of demand forecasting: short-term, long-term, and medium-term. Short-term forecasting looks less than one year ahead and is used for production scheduling, purchasing, and inventory. Long-term forecasting considers factors more than one year ahead like capacity expansion and is less precise due to uncertainties. Medium-term forecasting falls between short and long-term and is used when industries experience business cycles to adjust production levels while maintaining long-term plans.

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164 views

Types of Demand Forecasting

There are three types of demand forecasting: short-term, long-term, and medium-term. Short-term forecasting looks less than one year ahead and is used for production scheduling, purchasing, and inventory. Long-term forecasting considers factors more than one year ahead like capacity expansion and is less precise due to uncertainties. Medium-term forecasting falls between short and long-term and is used when industries experience business cycles to adjust production levels while maintaining long-term plans.

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Hijas PU
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We take content rights seriously. If you suspect this is your content, claim it here.
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TYPES OF DEMAND

FORECASTING

A demand forecast refers to the prediction or estimation of a future situation under a given constraints. Generally there are three types of demand forecasting they are, Short-term demand forecasting. Long-term demand forecasting. Medium-term demand forecasting. These are the three types of demand forecasting.

SHORT-TERM DEMAND FORECASTING:shot-term demand forecasting concerned with the short time period , usually of less than one year. this required for current production scheduling, purchase of raw materials and inventory of stocks,etc. the seasonality of sales and its impact on production planning , stock , distribution of products in markets is taken care of by

sort-term demand forecast.

LONG-TERM DEMAND FORCASTING:Long-term forecasting of demand is needed for capacity expansion i.e. growth of the firm , recruitment and diversification policies, for all these decision have long-run implication. In making such a forecast a firm has to take into account a policies. Sometimes it would be difficult to get precise data

about all such factors which affect long-term demand

Of industrial products. Longer the time period less precise will be the forecast mainly because of such

forecasting difficulties.
MEDIUM-TERM FORECASTING:Medium term forecasting is intermediate between the short-term situations. Its need is felt by a firm when the industry to which the firm belongs, is subjected to the trade cycle of a medium term. The overall long run trend in demand in such industries may be of increase or -

Decrease. When subject to a business cycle, a firm has to assess its demand situation and plan its activities accordingly. The firm may reduce its level output according to the reduced demand conditions but will not disturb its long term plan. Engineering goods industries and garments manufacturers often find such pattern of demand behavior in the market.

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