Estimating Future Demands:

Production management is concerned with estimating future demands for products and services (sales forecast) and the needed resources. Forecasting is an integral part of production management. Whereas making business plans, managers have to determine what course of action they have to take in future.

Forecasts are of long range type or short range type depending respectively upon whether decisions regarding products, processes and facilities or about production issues for short span of time. Sales forecast are the starting points for all other forecasts. There are two methods of estimating future demands:

     I.  Qualitative method, and

     II. Quantitative method.