Demand Forecasting for Consumer Non Durable Goods Like Eggs and Soaps free essay sample

Eggs are one of the popular items of food for non-vegetarians and semi-vegetarians. The present study tries to use regression technique of demad forecasting to estimate the demand fuction of eggs for Raigarh district of Chhatisgarh for various occupational groups in rural and urban areas. In this study we consider variables like size and composition of family, family income, occupation, number of earning members etc. Likewise for soaps we choose variables like growth in population and increase in per capita income for regression. Demand Forecasting for Eggs: Eggs are one of the popular items of food for non-vegetarians and semi vegetarians. We estimate demand function for eggs for Raigarh district of Chhatisgarh for various occupational groups in rural and urban areas. However we consider here the results for all groups combined. In our aggregated demand functions we consider the following variables: 1. Quantity of eggs consumed (the dependent variable), 2. Size and composition of family, 3. We will write a custom essay sample on Demand Forecasting for Consumer Non Durable Goods Like Eggs and Soaps or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Family income, 4. Occupation and 5. Number of earning members in the family. In our annual demand function we include only two variables viz. (i) quantity of eggs consumed, and (ii) per capita disposable income, for lack of data and problems of specification. The data on quantity of eggs and per capita disposable income have been taken arbitrarily for 20 years, from 1990-2010. We estimate the following forms of demand function: i) Y=a + b X (Linear) Y= quantity of eggs consumed, a = constant b = intercept X= per capita disposable income Here we have used single equation regression model, which carries two variables one is dependent and another one independent variable. The form equation is like this: i) Y= 3. 0085 + 0. 0619 XR2 = 0. 8569 (13. 5301) (2. 6) The linear function gave a ‘consistently better fit to the data. From the above equation we find that there is positive impact of egg consumption with rise of the income. When the income increases, there is significant rise i n the consumption demand of egg. Now, if per capita income projections are available, the demand for eggs can be forecast for the successive years. Demand Forecasting for Soap: For the purpose of forecasting future demand of soaps in India, the two variables which affect the consumption significantly, namely, growth in population and increase in per capita income can be chosen for regression. Unfortunately, the true consumption levels for soap in the past years are not available. Table-1 shows the consumption built up only on the basis of indigenous production from the organized sector and from imports. Regression equation Y = 425. 5541 + 1. 1756 X1 + 6. 4544X2 Where Y is consumption of soap, X1 is population, and X2 is per capita income. Coefficient of multiple correlation R123 = 0. 848 In India, quite a substantial portion of the demand for soap is met from the production in the small scale sector and therefore any projection based on the data furnished in Table-1 cannot be truly meaningful.