Importance of demand forecast, Managerial Economics

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Management Decisions: An effective demand forecast assists the management to take suitable steps in factors which are relevant to decision making like plant capacity, raw-material requisites, space and building requirements as well as availability of labour and capital. Manufacturing schedules can be drafted in compliance with the demand requisites; in this manner cutting down on the inventory, production and other related costs.

Evaluation: Demand forecasting also smoothes the process of evaluating efficiency of the sales department.


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