2. Demand forecasting is not a speculative exercise into the unknown. It is essentially a reasonable judgement of future probabilities of the market events based on scientific background. Explain the statement by elaborating different qualitative and quantitative methods of demand forecasting.
Demand forecasting is the process in which historical sales data is used to develop an estimate of an expected forecast of customer demand.
There are two types of forecasting methods: Qualitative and Quantitative.
Qualitative techniques are the ones which apply knowledge of the business, market, product and customer to make a judgment call on the forecast. These techniques are primarily based on opinion, like the Delphi Method, Market Research, Panel consensus etc.
Quantitative methods come in two main types: time-series methods and explanatory methods. Time-series methods make forecasts based purely on historical patterns in the data.