The Situation
The objective of this project is to forecast demand (FD) for the company’s product, based on historical data.
FD will be arrived at by examining two types of variables. One type will predict total industry demand (TID) and the other type will predict market share or relative demand (RD). Hence, FD=TID*MS, where MS=RD/N, where N is the number of companies in the industry.
Average price, average advertising, and time will be used to predict TID. Relative price, relative advertising, and last quarter’s relative demand will be used to predict RD.