Demand Forecasting

What is Demand Forecasting ? Where is it used ?

Methods used for Demand Forecasting ?

Case 1: Forecasting of Demand in Tourism Sector in

India
Indian Tourism Demand Schedule
S.No

Year

Actual Tourists (in Million)

2001

2.28

2002

2.07

2003

2.73

2004

3.46

2005

3.92

2006

4.45

2007

4.98

2008

Source : Indian Tour Operators Promotion Council (ITOPC)

http://www.itopc.org/travel-requisite/inbound-tourism-statistics.html

Forecast using Moving Average Method

Period (t)

Forecast (Ft)

Actual Demand

(in Million)

(in Million)

2.28

2.07

2.18

2.73

2.40

3.46

3.09

3.92

3.69

4.45

4.18

4.98

4.71

Moving average for every two years (n=2) was considered in forecasting.
Demand forecast for the year 2008 using moving average is 4.71 million foreign tourists.
The forecasting performance measured using the Mean Forecast Error (MFE) technique
is 0.8 million.

Forecast using Linear Regression Method

Demand function : Qd = 1408340 + 500858.75T
Where Qd - Demand on Indian Tourism and T - Time period in year
Period (t)
1

Forecast (Ft)

Actual Demand

(in Million)

(in Million)

1.91

2.28

2.41

2.07

2.91

2.73

3.41

3.46

3.91

3.92

4.41

4.45

4.91

4.98

5.42

<Chart >

Case 2: Global Demand forecasting for Milk / Dairy

products

http://www.scribd.com/doc/16478193/Tetra-Pak-Dairy-Index-2009

Year

2005

Dairy Consumption
( world wide )
in billion litres
242

2006

248

2007

254

2008

258

2009

263

2010

270

2011

276

2012

< Moving Average >

<Linear Regression>

y = 236.57 + 5.54 x
R Square = 1
Data is very good.
Demand Forecast for 2012 = 236.57 + 5.54 x 8 = 280.89 billion litres
<Chart >
http://www.scribd.com/doc/16478193/Tetra-Pak-Dairy-Index-2009

Case 3: Demand forecasting for .........

Dairy Whiteners / Creamers
( Data from Ministry of Food Processing Industries , Govt of India available in : http://mofpi.nic.in/ContentPage.aspx?
CategoryId=145 )

Demand: Past & Future

Year

th MT

1990-91

80

1991-92

83

1992-93

85

1993-94

86

1994-95

89

1995-96

91

1996-97

99

1997-98

95

1998-99

135

1999-00

183

2000-01

147

2001-02

160

2002-03

175

2003-04

190

2004-05

206

2005-06

224

2006-07

243

2007-08

263

2008-09

284

2009-10

307

<Data Table >

< Moving Average >
<Linear Regression>
<Chart >

Case 4: Demand forecasting for .........

http://mofpi.nic.in/ContentPage.aspx?CategoryId=145

Milk Production in India

Production in India

Year

Productio
n (Million
Tonnes)

Per Capita
Availability
(gms/day)

2005-06

1991-92

55.7

178

1992-93

58.0

182

1993-94

60.6

187

1994-95

63.8

194

1995-96

66.2

197

1996-97

69.1

202

1997-98

72.1

207

1998-99

75.4

213

1999-2000

78.3

217

2000-01

80.6

220

2001-02

84.4

225

2002-03

86.2

230

2003-04

88.1

231

2004-05*

90.7

229

94.6

220

Milk Production By States

Estimates of Milk
Production - State
wise

(000 tones)

State

All India

References

1
9
9
7
9
8

1
9
9
8
9
9

7
2
1
2
8

7
5
4
2
4

1
9
9
9
2
0
0
0

7
8
2
8
6

20
00
01

2
0
0
1
0
2

80
60
7

8
4
4
0
6