RUTH E.

DUCUSIN
BSIT – 3A MAJOR IN FOOD TRADES
DEMAND FORECASTING
MODULE 1 LESSON 3

What is the importance of demand forecasting and what factors do you need to consider to come up
with a good forecast? Kindly make a production forecast for the product of your proposed business
by using the qualitative forecast method.

“Unless you are a fortune teller, long-term business planning is a fantasy” - Jason Fried. From
what I have understood, this statement clearly defines the meaning of demand forecasting. In my own
opinion, demand forecasting is like telling someone’s fortune because both predict what will happen in
the future. Hence, it would be great if we already know what will happen for us to be prepared for it.
However, when it comes to business, only an accurate demand forecast will make a firm or market
successful.
Demand forecasting plays a big role in the market industry. It can lead a firm into success or into failure
depending on how accurate the forecast is. If a demand forecast is done accurately, then it would be a
great help in your business for it serves as your blueprint that can lead to a positive and favorable result.
Imagine going to a battlefield without any knowledge about your enemies, without any plans, or any
weapons, it would be a suicide. And that’s the reason why firms need to conduct demand forecasting.
This method can help businesses increase their sales, reduce costs, optimize inventory, have a proper
budgeting, satisfy customers, or in other words, this is the heart of a business. Well, if you can accurately
predict what will be the trends or demands for the next days, weeks, or months, then you would know
what to prepare and adjust in your products, services, or business per se. Thus, demand forecasting, if
done right, can increase your profits that can sustain and grow your business.
In doing demand foreca