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Demand Forecasting in Indian Retail Industry

Vijay Gabale (07305004) Ashutosh Dhekne (07305016) Piyush Masrani (07305017) Sumedh Tirodkar (07305020) Tanmay Mande (07305051). Demand Forecasting in Indian Retail Industry. Applied Economics Course Project. Motivation.

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Demand Forecasting in Indian Retail Industry

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  1. Vijay Gabale (07305004) Ashutosh Dhekne (07305016) Piyush Masrani (07305017) Sumedh Tirodkar (07305020) Tanmay Mande (07305051) Demand Forecasting in Indian Retail Industry Applied Economics Course Project

  2. Motivation • The A.T. Kearney Global Retail Development Index shows India on the top of the list. • Multi-outlet retail concept has gained acceptance. A report by Images Retail predicts Over 400 malls by 2010 • Competition: Survival of the fittest! • Forecasting of demand!

  3. Indian Retail Industry • Retail - The sale of goods or commodities in small quantities directly to consumers. • Retailers in India • Shoppers’ Stop • Westside (Trent) • Pantaloon (Big Bazaar) • Lifestyle • RPG Retail (Foodworld, Musicworld) • Crossword

  4. Challenges in Demand Forecasting • Scale of forecast • Erratic demands • Introducing new goods • Changing price • Restocking period • How do we resolve them?

  5. Techniques • Judgmental • Unaided • Delphi • Expert Systems • Simulated interactions • Quantitative • Extrapolation • Data mining – Least Square Regression

  6. Existing Surveys • The Indian Retail Report 2007 released by Kamal Nath on January, 09, 2007 • The India Retail Report 2007, Amitabh Taneja, Chief Convenor of India Retail Forum • An article by “Tata Strategic Management Group” in September, 2006 • India has huge population • The forecasting plays major role in quantifying trends • Sophisticated tools or expert analysts

  7. Our Survey • We visited Haiko, a division of the Lakewood Malls Pvt. Ltd. at Hiranandani Gardens. • Mr. Gaurav Purohit (Business Manager) • Haiko • Small scale retailer • Do not use sophisticated tools but historical data to analyze trends

  8. What are the key aspects of a forecasting exercise? • Beginning Early • Taking expert inputs • The tools used for demand forecasting cannot replace domain expertise • Thinking of multiple solutions • Being on the field

  9. Questionnaire • How is the forecasting done? • Past data and Targeted growth • Tastes and trends are subjective terms • What are some tips for developing a forecasting model for new product? • try out different forecasting techniques • What is the period of time in the future for which you do forecasting? • a six monthly basis, place orders at 2 months in advance • Could you share with us an example story?

  10. Questionnaire • Does the volume of sale have a bearing on the rack space you allocate to a good? • They have a fixed rack space and that dictates how much they can stock. • For all the analysis do you use software? • Could you relate a failure story? • The detailed interview in report!

  11. Conclusion • The increasing competition in Indian Retail Sector is compelling retailers to use demand forecasting tools. • Retailers who have their own brand labels use the forecasting techniques of the kind we study in theory. • On the other hand, small scale retailers can employ qualitative techniques on the historical data and considering the behavior trends in the market.

  12. References • Images retail. http://www.imagesretail.com/india retail report.htm. • Tata Strategic Management Group. Retail revolution. http://www.tata.com/tata strategic/articles/20060925 retail.htm. • A.T. Kearney. Global retail development index (GRDI) 2004-2007. http://www.atkearney.com/. • Kamal Nath. India retail report. http://commerce.nic.in/pressrelease/pressrelease detail.asp?id=1895. • Namita Singh, S. Jason Olasky, Kellie S. Cluff, and Jr. William F. Welch. Supply chain demand forecasting and planning. http://www.patentstorm.us/patents/7080026-fulltext.html. • Software & Consulting Services to the Consumer Goods Industry. Demand forecasting model. http://www.ibsw.com/demand.htm.

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