Q. Can you explain about Demand Forecasting?

Demand forecasting involves forecasting and estimating the quantity of a service or product that consumers will buy in future. It attempts to evaluate the significance and magnitude of forces which will affect future operating conditions in an enterprise. Demand forecasting includes use of various formal and informal forecast techniques like informed guesses, use of historical sales data or current field data gathered from representative markets. Demand forecasting can be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market. So demand forecasting is estimation of future demand. According to Cardiff and Still, 'Demand forecasting is an estimate of sales for a specified future period based on a proposed marketing plan and a set of particular competitive and uncontrollable forces'. Demand forecasting is a projection of firm's expected future demands.