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How would you grow your company if you did not know that for the next 2 years your average performance of each product would be X.? By knowing this you can estimate your income and then budget for your future. If the forecast is too great, inventories will be too high and money will be lost because of overproduction. If the forecast is too small, the demand for the product or service will out way the inventory and money will be lost because the customer cannot buy the product and future business may also be lost.
There are several methods that can be used to forecast demand. These are not limited to, but may include:
? Grass Roots Forecasting
? Panel Consensus
? Historical Analogy
? Time Series Analysis
? Delphi
All of these methods work basically the same...
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