Which forecast technique would you use to forecast demand for cement?steel?car?mobile ?
The products that you have mentioned can be grouped under two categories. Cement and Steel are commodities and are not end products in themselves. Car and mobiles are used by end consumers directly. So, the forecasting differs for the two groups. There are 4 ways to forecast demand for cement and steel. a. The simplest one is to take the time series data of cement and steel sales for the last 10 years by month (or by quarter) and have a trend line fitted into them using Excel graphs. This gives a fairly good estimate if you expect the trend in consumption to continue in the times to come. But, in economic turning points as the current scenario, this model fails as it can’t predict a down turn b. The second method is using last 1 year moving average as the forecast for the next quarter. This is again assuming that the past trend continues and it can’t factor in a downturn until it happens. c. Coming to more serious methods, we can try to see what is the correlation between the growth ra
