(c) Suitable trend equation: https://datingranking.net/lavalife-review/ Least Square Method: It is a mathematical procedure for fitting a line to a set of observed data points in such a manner that the sum of the squared differences between the calculated and observed value is minimized. This technique is used to find a trend line which best fit the available data. This trend is then used to project the dependant variable in the future.
Less than this method, a love is established between your wide variety necessary (created variable) additionally the separate details (explanatory parameters) like earnings, price of the good, pricing off relevant items etc
This procedure is quite common because it is basic low priced. Also, this new development means will bring fairly credible quotes of upcoming demand
The major restriction on the experience this can not be utilized where trend is cyclic that have evident flipping facts regarding troughs and highs. And additionally, this process can’t be employed for short term predicts.
(d) Regression analysis: This is the most popular method of forecasting demand. The equation will be of the form Y = a + bX. There could also be a curvilinear relationship between the dependent and independent variables. Once the regression equation is derived, the value of Y i.e. quantity demanded can be estimated for any given value of X.
Such as for example, more rates could well be of additional conversion as well as on one to base the purchase price-amounts relationship is projected in the way of regression equation and you will useful forecasting motives
Under this method, future demand is estimated by conducting market studies and experiments on consumer behaviour under actual, though controlled, market conditions.