Demand Management's Function as a Risk Diminishing Practice (Research Paper Sample)

This research paper describes role of demand management as a risk diminishing practice. While a business is able to measure the volume of demand at the current moment or over the recent time, it also has a need to estimate what it will be in the future, in the short and long term. Through the use of special techniques, businesses are able to collect data, analyze it, and obtain results that can later be used to forecast the future volume of demand to include it into the operational strategy. I then went ahead to analyze a number of techniques that businesses used to stimulate demand and adjust it to the previously forecasted levels.
Since the ultimate goal of any business is to make revenues by selling goods and services to consumers, the volume of demand determines the volume of required production and subsequent sales. It is therefore important that every company is to estimate the current level of demand, forecast any potential future changes to it, and take measures to stimulate its growth. I then defined Demand Management and Demand Forecasting. Demand management is a control of the consumer demand for services and products produced by a firm. It includes both the collection of internal projects and ideas and external factors and environment.
Demand forecasting on the other hand used by businesses to achieve a more efficient allocation of resources in the process of production, avoid excessive wastes, and determine the pricing strategy. The effectiveness of demand forecasting application is the lowest when the sample size is small or the demand planning framework has been misspecified. Nevertheless, the potential disadvantages are far outweighed by the potential advantages of this practice for a firm.
Finally, I discussed the role of demand management and forecasting as risk diminishing practices and concluded that these practices allow making the process of strategic planning more effective as the input information used in this process is more precise