Survey methods, statistical methods and other methods

SURVEY METHOD,STATISTICAL METHODS AND OTHER METHODS

Survey Methods

  • These methods are generally adopted in estimating short-term demand.
  • These methods include direct interview, complete enumeration, sample survey, opinion survey, etc.,
  • Survey methods include
    • Survey of consumer’s plan through direct interview of consumers
    • Collection of expert’s opinion and
    • Collection of opinion of sales representatives.
Market studies and experiments

  • Studies and experiments are carried out in consumer’s behaviour under actual, though controlled, market condition.
  • This method is known in common parlance as market experiment method. This method has the following serious disadvantages.
    • Experimental methods are very expensive and not affordable by small firms.
    • Forceful generalization with a high degree of reliability from too small sample size.
    • Results of controlled experiments are questionable in application to the uncontrolled long-term condition of market.
    • Changes in socio-economic conditions, political changes, natural calamities may invalidate the results.

Statistical Methods

  • Statistical methods utilize historical (time-series) data and cross-section data for estimating long term demand.
  • These methods are considered to be superior techniques of demand estimation because
    • Element of subjectivity in this method is minimum.
    • Method of estimation is scientific.
    • Estimation is based on theoretical relationship between dependent and independent variables.
    • Estimates are relatively more reliable and estimation involves smaller cost.
    • Frequently used statistical methods for demand projections are
      • Trend projection method which involves both graphical and fitting trend equation.
      • Regression method.

Other methods of forecasting demand

  • There are several other methods available for forecasting demand. However the choice depends on the availability of data, purpose and technical competence of forecaster.
  • These methods include the end-use method, econometric methods like Barometric Forecasting, Delphi Technique, Box-Jenkins method, moving average method, etc.,
Last modified: Saturday, 2 June 2012, 7:24 AM