Nibm Iii Semester Assignments
Managerial Economics
Suppose you are the Marketing Manager of Bayer & Company, Ahmedabad, which are the techniques you will apply in forecasting demand of a product yet to be manufactured.
The firm must plan for the future. Planning for the future involves forecasting. A forecast is an estimation or prediction about situations which are most likely to occur in near or distant future. No businessman can afford to ignore forecasting if he wants to thrive and prosper in his business. The firm has to forecast the future level of demand for its product under different possible circumstances; such as prices, competition, promotional activities and general economic activity. Similarly forecasting will be necessary with reference to costs under changing conditions of availability of raw materials and their respective prices, changing technology, wage rates, labour training and capital acquisition programmes. Forecasting does play a key role in managerial decisions and hence forecasting is emphasized in the study of managerial economics. The objective of business forecasting is to minimize risk and the margin of uncertainty in business.
Techniques of Demand Forecasting
Many techniques are available that can be used in forecasting economic variables. Some forecasting techniques are quantitative, others are qualitative. When quantitative information is not quite available then qualitative technique is to be relied upon for getting the required forecasts.
There are, as such, two approaches to demand forecasting. First is to obtain information about the intentions of the spenders through collecting experts’ opinion or by conducting interviews with the consumers. Second is to use past experience as the guide and using or projecting the past statistical relationships to obtain the expected level of future demand. The first method is also considered to be qualitative and is mostly used for short-term forecasting; whereas the second method is quantitative and is used
Suppose you are the Marketing Manager of Bayer & Company, Ahmedabad, which are the techniques you will apply in forecasting demand of a product yet to be manufactured.
The firm must plan for the future. Planning for the future involves forecasting. A forecast is an estimation or prediction about situations which are most likely to occur in near or distant future. No businessman can afford to ignore forecasting if he wants to thrive and prosper in his business. The firm has to forecast the future level of demand for its product under different possible circumstances; such as prices, competition, promotional activities and general economic activity. Similarly forecasting will be necessary with reference to costs under changing conditions of availability of raw materials and their respective prices, changing technology, wage rates, labour training and capital acquisition programmes. Forecasting does play a key role in managerial decisions and hence forecasting is emphasized in the study of managerial economics. The objective of business forecasting is to minimize risk and the margin of uncertainty in business.
Techniques of Demand Forecasting
Many techniques are available that can be used in forecasting economic variables. Some forecasting techniques are quantitative, others are qualitative. When quantitative information is not quite available then qualitative technique is to be relied upon for getting the required forecasts.
There are, as such, two approaches to demand forecasting. First is to obtain information about the intentions of the spenders through collecting experts’ opinion or by conducting interviews with the consumers. Second is to use past experience as the guide and using or projecting the past statistical relationships to obtain the expected level of future demand. The first method is also considered to be qualitative and is mostly used for short-term forecasting; whereas the second method is quantitative and is used