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Demand Analysis PRESENTED BY :-BABASAB PATIL

Demand analysis ppt bec bagalkot mba

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Demand analysis ppt bec bagalkot mba

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Page 1: Demand analysis ppt bec bagalkot mba

Demand Analysis

PRESENTED BY :-BABASAB PATIL

Page 2: Demand analysis ppt bec bagalkot mba

The sources of Data Collection for Demand Forecasting

Through a market research a variety of information .

Qualitative and quantitative is called as “DATA”.

This have to be collected to estimation of Demand

function and demand forecasting.

These information may be pertaining to varies aspects

of market and demand.

Page 3: Demand analysis ppt bec bagalkot mba

Cont….

Demand in Past and Present.

Nature of product.

Types of consumer-

Domestic consumers and Industrial consumers.

Age.

Sex.

income of the consumers.

Attitude.

Preferences.

Tastes.

Habits.

Page 4: Demand analysis ppt bec bagalkot mba

Price Quotations in the retail and wholesale markets.

Urban.

Rural.

Local.

National.

International or Global.

Page 5: Demand analysis ppt bec bagalkot mba

Sales Promotion.

Advertising .

Free samples.

Discounts.

Window display.

As well as the expenditures so incurred or involved.

Page 6: Demand analysis ppt bec bagalkot mba

Primary and Secondary Data

Primary Data:

Primary data or information are original in

character which are collected for the first time for the

purpose of analysis. Primary data are raw data and require

statistical processing.

Page 7: Demand analysis ppt bec bagalkot mba

Secondary Data

Secondary data or information are those which are

obtained from someone else’s records. These Data are already

in existence in the recorded or published forms. Secondary

Data are like finished products since they have been processed

statistically in some form or the other.

Page 8: Demand analysis ppt bec bagalkot mba

Secondary Sources of Data

Official publications of the Central, state and local

Governments.

1) Plan documents.

2) census of India.

3) Statistical Abstracts of the Indian Union.

4) Annual Survey of Industries.

5) Annual bulletin of Statistical of Exports and Imports.

6) monthly studies of production of selected Industries.

7) Economic Survey, National Sample Survey Reports.

Page 9: Demand analysis ppt bec bagalkot mba

Trade and Technical or Economic journals and publication

1) Economic and political weekly.

2) Indian Economic journal.

3) Stock exchange directory.

4) Basic statistics and other information's supplied by the centre

for monitoring Indian Economy.

Page 10: Demand analysis ppt bec bagalkot mba

Official publications of International Bodies

1) IMF.

2) UNO.

3) World Bank etc.

Page 11: Demand analysis ppt bec bagalkot mba

Market reports and trade bulletins published by stock exchange

1) Trader associations.

2) Large business houses.

3) Chambers of Commerce, etc.

Page 12: Demand analysis ppt bec bagalkot mba

Publications brought out by research institutions

1) Universities.

2) Associations. etc.

Page 13: Demand analysis ppt bec bagalkot mba

Unpublished Data

1) Firm’s account books

1) Sales.

2) Profits.etc.

secondary data should not be taken at their face

value and are never to be used blindly.

Page 14: Demand analysis ppt bec bagalkot mba

Statistical Methods of Forecasting Demand

There are various methods adopted to estimate potential demand.

Statistical methods are obviously more scientific, against crude value

judgment used to estimate future demand.

One must take a mid-way by combining statistical results with the value

judgment.

Again different statistical forecasting methods are not mutually exclusive.

They are to be used in combination for accuracy and cross checking

purposes.

For forecasting purposes, it is essential to estimate the structural form and

parameters of the demand function empirically.

Page 15: Demand analysis ppt bec bagalkot mba

Two types of data for demand estimation:

Time series data

Cross-sectional data

Time series data

Time series data refer to data collected over a period of time according

historical changes in price, income, and other relevant variables influencing

demand for a commodity.

Time series analysis relate to the determination of change in a variables in

relation to time. Usually trend projections are important in this regard.

Page 16: Demand analysis ppt bec bagalkot mba

Cross-sectional Data

Cross -sectional analysis is undertaken to determine the effects

of changes in determining variables like price, income etc. On

the demand for a commodity, at a point of time.

In time series analysis for instance, for measuring income

elasticity of demand, a sales income relationship may be

established from the historical data and their fast variations in

cross-sectional analysis, however different levels of sales

among different income groups may be compared at a specific

point of time.

Page 17: Demand analysis ppt bec bagalkot mba

The Important Demand Forecasting Methods are:

Consumption Level Method

Trend Projection Method

Regression Analysis and Econometric Method

Page 18: Demand analysis ppt bec bagalkot mba

Consumption Level Method

Consumption Level demand may be estimated on the basis of the co-

efficients of income elasticity and price elasticity of demand.

Viewing projected income level and income elasticity of demand

relationship, demand forecasting may be made as under:

D*=D(1+M*.em)

Where, D*=Projected per capita demand

D=Per capita demand

M*=Projected relative/percentage change in per capita

income.

em=Income elasticity of demand.

Page 19: Demand analysis ppt bec bagalkot mba

Trend Projection Method

A time series analysis of sales data over a period of time is

considered to serve as a good guide for sales or demand forecasting.

For long-term demand forecasting trend is computed from the time

based demand function data.

Trends refers to the long-term persistent movement of data in one

direction – upward or downward.

There are two important methods used for trend projections: The method as moving averages. The least square method

Page 20: Demand analysis ppt bec bagalkot mba

The Method of Moving Averages.

A moving average forecast is based on the average of a certain

number of most recent periods.

One can select the number of months or years or other period

units in the moving average according to how for back the

data is relevant to future observations.

Page 21: Demand analysis ppt bec bagalkot mba

The least square method

The method of least squares is more scientific as compared to

the method of moving averages.

It uses the straight line equation y= a+bx, to fit the trend to the

data.

Page 22: Demand analysis ppt bec bagalkot mba

Regression analysis and econometric model building

Most commonly for demand forecasting proposes, the

parameters of the demand function are estimated with

regression analysis.

In demand regression equations relevant variables have to be

included with practical considerations and relevant data have

to be obtained.

Page 23: Demand analysis ppt bec bagalkot mba

Examples:

Personal disposal income towards demand for consumer product.

Agricultural or farm incomes towards demand for the agricultural

equipments, fertilizers, etc.

Construction contracts for demand towards building material such

as cement, bricks, steel, tiles etc.

Automobile registry over a period towards demand for car spare

parts, petrol etc.

Page 24: Demand analysis ppt bec bagalkot mba

Thank you