top-rated free essay

Demand Forecast of Britannia Industries Ltd

By tanmoy7 Aug 11, 2012 531 Words
The use of historic data to determine the direction of future trends is known as demand forecasting. Forecasting is used by companies to determine how to allocate their budgets for an upcoming period of time. This is typically based on demand for the goods and services it offers, compared to the cost of producing them. Investors utilize forecasting to determine if events affecting a company, such as sales expectations, will increase or decrease the price of shares in that company. Forecasting also provides an important benchmark for firms which have a long-term perspective of operations.

IMPORTANCE OF DEMAND FORECASTING Forecasting product demand is crucial to any supplier, manufacturer, or retailer.Forecasts of future demand will determine the quantities that should be purchased,produced, and shipped. Demand forecasts are necessary since the basic operationsprocess, moving from the suppliers' raw materials to finished goods in the customers'hands, takes time. Most firms cannot simply wait for demand to emerge and then react toit. Instead, they must anticipate and plan for future demand so that they can reactimmediately to customer orders as they occur. In other words, most manufacturers "maketo stock" rather than "make to order" – they plan ahead and then deploy inventories offinished goods into field locations. Thus, once a customer order materializes, it can befulfilled immediately – since most customers are not willing to wait the time it would take toactually process their order throughout the supply chain and make the product based ontheir order. An order cycle could take weeks or months to go back through part suppliersand sub-assemblers, through manufacture of the product, and through to the eventualshipment of the order to the customer. TYPES OF DEMAND FORECASTING:

The demand forecasting can be done in any of the following ways: a) opinion polling method
b) statistical method
The statistical method/quantitative method of demand forecasting is followed.

a) time series projection methods this includes:
moving average method
exponential smoothing method
trend projection methods
b) casual methods this includes:
chain-ratio method
consumption level method
end use method

The simple moving average method forecasts on the basis of demand values during the recent past. Such a method is applicable to time series that doesn’t have any pronounced behavioural pattern of fluctuations. The formula for simple moving average is given as:

The past sales data of three years of Britannia Industries Ltd. Has been selected for the purpose of forecasting the data for the next year using the simple moving average mrthod. (turnover in crores)

Mar 11| Mar 10| Mar 09|
4250.13| 3427.97| 3142.89|

Demand forecst using the moving average method for Mar’ 12 = sale of 09 + 10 + 11
Mar 12( forecasted)| Mar 11| Mar 10| Mar 09|
3606.99| 4250.13| 3427.97| 3142.89|

From the above graph, it can be seen that the company has been performing good for the past three years continuously with the demand continuously increasing at a good rate. But the forecast shows that there has been decline in the demand.

Cite This Document

Related Documents

  • A Project Report on Britannia Industries Ltd

    ...INTERNATIONAL MANAGEMENT A PROJECT REPORT ON BRITANNIA INDUSTRIES LTD Submitted to Dr. A.K.Sengupta Submitted By, Nivedita Birdawde MBA Britannia Industries Limited is an Indian company based in Bangalore that is famous for its Britannia and Tiger brands of biscuit, which are highly recognized throughout the country which was found...

    Read More
  • Demand Forecast

    ...million. Figure 2 below shows the major GSM operator wise number of subscribers as at June 2013. Figure 2 In our project we have attempted to forecast the demand of mobile subscriptions in North India in the Month of December 2013 by use of the following models: Logistics Curve Gompertz Curve Bass Model Logistics Curve: A logistic...

    Read More
  • Demand Estimation for Britannia Biscuit Industry

    ...Demand Estimation for Britannia Biscuit Industry 1.Introduction: Our objective was to study the demand variation of Britannia Biscuits in India with respect to certain variables like, Price, Price of the substitute (Parle Biscuits), Income of Consumer and Population. To achieve this we assume all other factors like Tastes of Consumer, Advert...

    Read More
  • Enager Industries Ltd

    ...IntroductionEnager Industries Ltd (Enager) was a relatively young company whom manufactured and produced products/services within three divisions- Consumer Products, Industrial Products and Professional Services. Consumer Products, the oldest among the three divisions in Enager, designed, manufactured and marketed a line of houseware items. Indu...

    Read More
  • Teva Pharmaceutical Industries Ltd

    ... Strategic Management Major Assignment -Analysis on Teva Pharmaceutical Industries Ltd. 1. Introduction 1.1 Teva at a Glance Founded in 1901, Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) was formed by three young pharmacists in Jerusalem, Israel. Teva is a leader in the global pharmaceutical industry: one out of every seven prescriptio...

    Read More
  • Roots Industries Ltd. India

    ...Company Analysis ROOTS Industries Ltd. is a leading manufacturer of HORNS in India and the 11th largest Horn Manufacturing Company in the world. Headquartered in Coimbatore - India, ROOTS also plays a dominant role in the manufacture of Horns and other products like Castings and Industrial cleaning machines. Roots Industries Limited has oc...

    Read More
  • Taurine Industry around China & World - Market Size, Demand & Forecast to 2019

    ...Research Report on Global and Chinese Taurine Industry, 2009-2019 is a professional and in-depth market survey on Global and Chinese Taurine industry. The report firstly reviews the basic information of Taurine including its classification, application and manufacturing technology; The report then explores global and China’s top manufacturers ...

    Read More
  • Global and China VAE Emulsion Industry- Market Size, Demand & Forecast study on the current state of the VAE Emulsion industry in Global and China. The report provides a basic overview of the industry including definitions, applications and industry chain structure. Global market analysis and Chinese domestic market analysis are provided with a focus on history, developments, trends and competitive landsc...

    Read More

Discover the Best Free Essays on StudyMode

Conquer writer's block once and for all.

High Quality Essays

Our library contains thousands of carefully selected free research papers and essays.

Popular Topics

No matter the topic you're researching, chances are we have it covered.