DEMAND FORECASTING

Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting involves techniques including both informal methods, such as calculated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets. Demand forecasting may be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market. Demand forecasting can be categorized on basis of: 1) The level of forecasting firm, industry and economy. Here we are doing the firm level of forecasting 2) Time Period short run and long run Here we are doing the forecasting for short run 3) Nature of Goods capital and consumer goods The firm is dealing in solutions to software problems. Demand Forecasting can be done by two methods:

1) Qualitative Method It includes various methods like Consumers opinion survey, Sales force composites, Experts opinion method, Market simulation and Test marketing. 2) Quantitative Method It includes methods like Trend projection, Arima test, Econometric method and Regression analysis. Different services offered by the company have different demand in the different markets. For that we need to have the data of revenue for the various geographical locations(markets). We are taking the company as a whole and will see the effect on Revenue with time with the help of Regression Analysis. Linear regression is an approach to modelling the relationship between a scalar variable Y and one or more variables denoted X. In linear regression, data are modelled using linear functions, and unknown model parameters are estimated from the data. Such models are called linear models. Single variable linear regression Year = x where x = 1, 2, 3,...., 10

Demand = y D = y + e Where D is actual demand e= D y To find out whether this is the line of best fitted to be sure that this sum of squares is a min. Determination of the regression line In general form y = a + bx Where y is dependent variable, and x is independent data variable. When a and b specified this line will be specified. So the company which we took is Infosys and we have identified for major markets in which the demand could be forecasted.

DEMAND FORECASTING OF US :
The strongest growth outlook for U.S. demand for information and communication technology since the 2008 financial crisis is likely to help Narayana Murthy revive Infosys Ltd (INFY.NS), the Indian IT giant he founded, but the updraft will also boost its faster-growing rivals

Actual Year Revenues forcast revenue percentage 2007 7591.931357 8323.317 63.3 2008 10314.591 9515.76 62 2009 13037.25064 13709.976 63.2 2010 15759.91029 14964.236 65.8 2011 18482.56993 17958.153 65.3 2012 21205.22957 21556.026 63.9 2013 23927.88921 24291.904 60.2 2014 26650.54886 62.453581 2015 29373.2085 62.353051 2016 32095.86814 62.269823 2017 34818.52779 62.199783 2018 37541.18743 62.140027

Graphical representation showing the trend of Demad in US in upcoming years.

40000 35000 30000 25000 20000 15000 10000 5000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues forcasted Actual revenue

DEMAND FORECASTING OF EUROPE :

The company sees challenges in the global economic situation and thats resulting in slower IT spends by large corporations, Chief Executive Officer S.D. Shibulal said in the statement. Clients in Europe are also cancelling the orders so overall the demand forecast is not that bright .

Actual Year Revenues forcasted revenue percentage 2007 3212.991964 3471.336 26.4 2008 4148.1945 4312.788 28.1 2009 5083.397036 5726.952 26.4 2010 6018.599571 5230.66 23 2011 6953.802107 5912.715 21.5 2012 7889.004643 7387.746 21.9 2013 8824.207179 10088 25 2014 9759.409714 22.8704514 2015 10694.61225 22.7023787 2016 11629.81479 22.5632315 2017 12565.01732 22.4461343 2018 13500.21986 22.3462306

Though the market is not very strong as of US but one fourth of the total revenue come from Europe.
16000 14000 12000 10000 8000 6000 4000 2000 0 Revenues forcasted Actual revenue

2010

2015

2007

2008

2009

2011

2012

2013

2014

2016

2017

DEMAND FORECASTING OF INDIA:

Infosys Ltd, has signed a deal with India Post to manage its rural operations platform, months after it signed a separate deal with the state-run postal network that was the biggest financial services contract ever for an Indian information technology (IT) services company.The project is estimated to be about 700 crore.

Year Revenues forcasted 2007 74.08560714 2008 205.6017857 2009 337.1179643 2010 468.6341429 2011 600.1503214 2012 731.6665 2013 863.1826786 2014 994.6988571 2015 1126.215036 2016 1257.731214 2017 1389.247393 2018 1520.763571

Actual revenue percentage 210.384 1.6 199.524 1.3 282.009 1.3 272.904 1.2 605.022 2.2 742.148 2.2 968.448 2.4 1.6699746 1.7119245 1.7466241 1.7758035 1.8006829

2018

When it comes to market of India, IT sector is still a niche market and not many projects come from India but said that it is also a strong market.
1600 1400 1200 1000 800 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues forcasted Actual revenue

DEMAND FORECASTING OF REST OF THE WORLD:

INFOSYS needs to enhance its footsteps in other countries .There are many countries like China, South Africa, Brazil, Japan, Russia where there are opportunities.

Actual Year Revenues forcasted revenue percentage 2007 746.3125 1143.963 8.7 2008 1392.255571 1319.928 8.6 2009 2038.198643 1974.063 9.1 2010 2684.141714 2274.2 10 2011 3330.084786 3025.11 11 2012 3976.027857 4048.08 12 2013 4621.970929 5003.648 12.4 2014 5267.914 8.844166942 2015 5913.857071 8.989470561 2016 6559.800143 9.109660961 2017 7205.743214 9.210730853 2018 7851.686286 9.296906734

Infosys share in rest of the World is only 8.1%.

9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Revenues forcasted Actual revenue

2014

2007

2008

2009

2010

2011

2012

2013

2015

2016

2017

Demand forecasting can give a firm a clear Idea about the future projections and help the firm in making decisions and to strategise accordingly. All top firms evaluate and take help of demand forecasting in their important decisions.

2018