# Forecasting in Fmcg Industry

3664 Words Dec 5th, 2010 15 Pages
1. INTRODUCTION TO THE TERM PAPER
1.2 BACKGROUND
Forecasting relates to the management functions of planning, organizing and controlling. It is one of the key elements of operations management. Companies serve their customers and the society at large by producing various goods and services. The market need is continuously changing. In order to cope up with the changing demand companies must develop a good forecasting technique to determine the demand level
For this term paper, five different products from different companies, selected from the fast moving consumer goods industry, were taken as the subject of study. The products selected are of different nature in the consumer industry, which made them ideal for the term paper.
1.3
It has two pack sizes: 30 gm and 60 gm.

Forecasting Technique for Savlon

Yearly forecasting for Savlon antiseptic is done for January to December. The forecasting for the next year starts from October of the year preceding it.

Quantitative Technique
The forecasting for Savlon is done using a mixture of the different techniques that we have learned in the class.

1. Simple Average- The actual sales data for last two or three years is taken for forecasting the demand of the next year. The month wise data of sales is considered. The demand for the next year is then calculated by the simple average method and the gross figure for the next year is found.

2. Weighted average- The yearly forecast is then broken down into monthly forecast according to the average percentage sales in each month of the year. For example if the forecasted demand for the next year is 10000 litres of Savlon liquid antiseptic and average percentage sales in January in the last two or three years was 12 percent of the total sales during that period the forecasted demand for January in the next year will be 12 percent of 10000 litres i.e. 1200 litres

3. Moving Average- The data for the previous two or three years is taken.

4. Trend analysis- The forecasting figure is not only based on the value found by the simple average calculation. Since simple average does not detect changing underlying pattern the trend analysis is done. The