Managerial Economics

MANAGERIAL ECONOMICS

Name.: Saumya Ranjan Jena

Q: Suppose you are the marketing manager of bayer and company Ahmedabad which are the techniques you will apply in forecasting demand of a product yet to be manufactured?

A: Forecasting is the process of making projections of demand for products by examining past and present performance levels, combined with an assessment of available products and markets. This may be carried out within the government service or by individual companies in a purely commercial context. The following approaches can be used:

· Target setting;

· Growth trends;

· Growth rates adjusted for new technology adoption;

· Sampling.

Target setting This method is commonly used in developing countries where government is directly involved in planning and seed supply. In a centrally managed economy, targets are likely to be set at a national level and production plans fixed for each region.

India is an example of a more open economy where both the public and private sectors coexist in a well-developed seed industry, but where the government retains a coordinating function and has the ultimate responsibility for the security of seed supply. The Ministry of Agriculture sets the targets and organizes meetings to establish the supply situation and production plans of the various organizations involved.

Companies may opt to set a target for an ideal sales level while, at the same time, recognizing that this is unlikely to be achieved and budgeting for a more achievable situation.

Growth trends. This approach is based on the assumption that the rate of growth of seed demand as seen in past years will continue. This may give unrealistically high forecasts and will depend on the stage of market development for improved seeds. Small increases in volume in the early stages of improved seed use will represent a large increase in percentage terms, which may not be possible to sustain.

Growth rates adjusted for new technology adoption....