Demand Forecasting

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Real life example of Demand Forecasting:

CASE STUDY: Tata Ace-A transformation in transport system: 

BEFORE THE CONCEPT: 

* Heavy Goods Lighter Goods Very light goods
* High costs Economical Low Efficiency
* Safety Less safety Time Consuming
* For wider roads For remote areas

Tata Ace – Use of Survey method for Demand Forecasting: 
Step 1: Determining the principle behind the forecast
* To find a proper competitor which would be efficient, cost-effective and would be able to cancel out the demerits of the present commercial vehicle market scenario especially 3 Wheelers. Step 2: Set up a time horizon for the forecast.

* Time Limits for the set of activities concerned were frozen as shown below.

Activity Involved| Time Period|
1-Data Collection| Past 5 years records|
2-Poaitioning & Planning| 24 months|
3-Test Model & Simulation of Market Conditions| 24months| 4-Analysis| 3months|
5-Final Decision Making| 3months|

Step 3: Choosing a Forecasting method
* The Survey Method of Forecasting was selected as it was essential to get a perspective from the common user as the entrant vehicle was to be designed to be a way of promoting entrepreneurs. Step 4: Collect and Analyze Data.

* In a time period of 6 months, a huge database was created consisting of the competition and the existing market conditions. We sum up the data in the chart below.

 

Step 5: Prepare Forecast
* After through study of competition and live Commercial Vehicle Market Conditions, it was decided that the time was spot on to position an entrant in the Light Commercial Vehicle division. Forecast yield was made that if the entrant was positioned midway between the Truck and the 3 Wheeler Segment, its market share would be at least 50% within a short while.

Step 6: Observe Forecast
* A time of 4 years was decided as the period to observe forecast to pass judgement on the...
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