Journal of Applied Economic Research
ISSN 2712-7435
Forecasting Product Demand in Terms of Demand Volatility
Trubchanin V.V.
Abstract
Abstract. The article highlights the sub-tasks in forecasting product demand to justify the implementation of measures aimed at ensuring the competitive position during sharp fluctuations in demand for the enterprise’s basic products. The purpose of this paper is to develop a scientific and methodological approach to the forecasting of the demand for the enterprise’s products, considering the probability of acute demand contractions. The paper identifies the basic elements of demand forecasting within the given approach and suggests a model targeted at strengthening the justification of demand forecasting through the consideration of negative factors, at assessing the manufacturing capacity that will become available in the future, defining the key areas of focus for retaining and developing its market. The economic meaning of the final value of product demand is that it shows the average anticipated demand for each type of the company’s products, in each period of time in each market, taking into account the total possible impact of all factors of an acute demand contraction that can become a basis for sales revenue planning. The approach allows one to define demand thresholds, which will help to make much more grounded managerial decisions in manufacturing planning as well as the manufacturing diversification planning. It was concluded that the scientific and methodical approach to forecasting the demand for the company's products taking into account the threat of acute demand contractions, in which the demand forecasts derived from traditional methods of demand forecasting, makes it possible to adjust to the mean value of the factors’ impact on the market size and the market share of the enterprise. From the standpoint of justifying manufacturing diversification-related managerial decisions, the use of the developed approach will identify the most vulnerable types of products and markets, define the enterprise’s time reserves to prepare for the diversification. It can also be used to generate a list of promising products.
Keywords
Key words: demand forecasting; event probability; manufacture diversification; demand contraction; competitive growth; managerial decisions justification; market volume; market share; investment; time period; reserves; demand thresholds.
About Authors
Trubchanin Vladimir Viktorovich – Doctor of Economics, the Leading Research Fellow, Institute of Economic Research, Donetsk, Ukraine (283048, Donetsk, Kievskiy district, Universitetskaya street, 77); e-mail: smuseconri@mail.ru.
DOI: http://dx.doi.org/10.15826/vestnik.2017.16.2.010
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