8.2 Demand Analysis

The Industry Demand Analysis will help the Marketing and Production Departments anticipate future demand. Marketing can use the total demand for each segment as it creates its forecasts. This will provide a starting point for a sales forecast (see 9. FORECASTING for detailed discussions of forecasting). Production can use the results when making capacity buy and sell decisions.

You will need the Segment Analysis pages (pages 5 - 9) of The Capstone® Courier for Round 0. To analyze the demand for each segment, find the demand at the start of the simulation (Round 0), then calculate demand for Rounds 1 through 8.

At the top of each Segment Analysis page you will find a box called Statistics. Copy the Total Industry Unit Demand number into the Round 0 column of Form 3. Next, for each segment, multiply the Round 0 demand by the growth rate and add the result to the Round 0 demand. This will give you a close approximation of Round 1 demand. Repeat this process for all eight rounds and enter the information in Form 3.

If you prefer, you can use the following shortcut. Convert the growth rate percentage to a decimal then add 1 to the decimal:

Traditional Segment Growth Rate = 9.2% = 0.092

1 + 0.092 = 1.092

Multiply the Round 0 Traditional demand by 1.092. This will give you a close approximation of Total Industry Demand for Round 1. Multiplying the Round 1 demand by 1.092 will give the Round 2 Total Industry Unit Demand, etc.

Form 3:  Demand Analysis

Remember, these numbers are in thousands! For example, if the Round 0 Total Industry Unit Demand for the Traditional segment reads 7,387, the Traditional Segment demanded 7,387,000 units.