Demand For Casting of Electronic Industry

Demand Forecasting Consumer Electronics Industry

Demand Forecasting for Consumer Electronics Industry

Acknowledgement

We are extremely grateful to Dr.Thiagrajan for giving us his valuable guidance throughout the project. We are thankful for his necessary suggestions which resulted in successful completion of the project.

The whole experience of making the project was an extremely enriching one.

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ContentsAcknowledgement.................................................................................................................................3

Basic Concepts of Demand and Supply..................................................................................................5

The Law of Demand...............................................................................................................................5

The Law of Supply..................................................................................................................................6

Equilibrium............................................................................................................................................6

Consumer Electronics Industry..............................................................................................................8

Market Definition..................................................................................................................................8

Indian Consumer Electronic Industry...................................................................................................10

Industry Trends in Consumer Electronics............................................................................................11

Increased customisation to suit domestic demand.............................................................................13

Expanded distribution is critical...........................................................................................................14

Market Segmentation I........................................................................................................................15

Market Segmentation II.......................................................................................................................16

Domestic manufacturing to expand....................................................................................................17

Demand Forecasting............................................................................................................................18

Meaning of demand forecast..............................................................................................................18

Purpose of demand forecasting...........................................................................................................18

Purpose of short term forecasting...................................................................................................18

Purpose of long term forecasting....................................................................................................19

Quantitative Forecasting Methods......................................................................................................19

Qualitative Forecasting Methods........................................................................................................21

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Basic Concepts of Demand and Supply

Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand. The relationship between demand and supply underlie the forces behind the allocation of resources. In market economy theories, demand and supply theory will allocate resources in the most efficient way possible.

The Law of Demand

The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good. In other words, the higher the price, the lower the quantity demanded. The amount of a good that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that good. As a result, people will naturally avoid buying a product that will force them to forgo the consumption of something else they value more. The graph below shows that the curve is a downward slope. A, B and C are points on the demand curve. Each point on the curve reflects a direct correlation between quantities demanded (Q) and price (P). So, at point A, the quantity demanded will be Q1 and the price will be P1, and so on. The demand relationship curve illustrates the negative relationship between price and quantity demanded. The higher the price of a good the lower the quantity demanded (A), and the lower the price, the more the good will be in demand (C).

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http://www.investopedia.com/terms/m/marketeconomy.asp


The Law of Supply

Like the law of demand, the law of supply demonstrates the quantities that will be sold at a certain price. But unlike the law of demand, the supply relationship shows an upward slope. This means that the higher the price, the higher the quantity supplied. Producers supply more at a higher price because selling a higher quantity at higher price increases revenue. A, B and C are points on the supply curve. Each point on the curve reflects a direct correlation between quantities supplied (Q) and price (P). At point B, the quantity supplied will be Q2 .

Time and Supply

Unlike the demand relationship, however, the supply relationship is a factor of time. Time is important to supply because suppliers must, but cannot always, react quickly to a change in demand or price. So it is important to try and determine whether a price change that is caused by demand will be temporary or permanent. Let's say there's a sudden increase in the demand and price for umbrellas in an unexpected rainy season; suppliers may simply accommodate demand by using their production equipment more intensively. If, however, there is a climate change, and the population will need umbrellas year-round, the change in demand and price will be expected to be long term; suppliers will have to change their equipment and production facilities in order to meet the long-term levels of demand.

Equilibrium

When supply and demand are equal (i.e. when the supply function and demand function intersect) the economy is said to be at equilibrium. At this point, the allocation of goods is at its most efficient because the amount of goods being supplied is exactly the same as the amount of goods being demanded. Thus, everyone (individuals, firms, or countries) is satisfied with the current economic condition. At the given price, suppliers are selling all the

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goods that they have produced and consumers are getting all the goods that they are demanding. As you can see on the chart, equilibrium occurs at the intersection of the demand and supply curve, which indicates no allocative inefficiency. At this point, the price of the goods will be P* and the quantity will be Q*. These figures are referred to as equilibrium price and quantity. In the real market place equilibrium can only ever be reached in theory, so the prices of goods and services are constantly changing in relation to fluctuations in demand and supply.

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Consumer Electronics Industry

Market Definition

The Indian electronic industry is divided into six segments: Consumer electronics, Industrial electronics, Computers, Strategic electronics, Communication and Broadcasting equipment and Electronic components. The consumer electronics sector dominates the industry with 33.8 per cent share and has benefited from a large and expanding market. The industrial electronics and computer sector each has a share of over 15 per cent.

Consumer electronics consists of products that are directly consumed by end-users, such as televisions, VCD/MP3 players, microwave ovens, etc. This segment has a large manufacturing base, and is quite competitive, with presence of several global players in India. The Consumer electronics industry contributes about 33.80 percent of the total electronics production in India. The total production of consumer electronics was US$ 3.74 billion in 2004-05, registering a growth of 13 per cent over production in the previous year. The growth has been primarily powered by colour televisions (CTV), which grew from 8.9 million units in 2003-04 to over 10 million in 2004-05. CTV growth in turn is driven by growth in Flat Screen TVs (FST) that is estimated to constitute nearly 20 per cent of the CTV market. Other growth segments in consumer electronics include microwave ovens and VCD/MP3 players - the microwave oven industry is estimated to be growing at the rate of 25-30 per cent.

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These trends are a reflection of increasing consumption and aspiration levels among Indian consumers, driven by demographic and lifestyle changes. As these trends are positive for the future, the outlook for consumer electronics segment is quite positive.

The consumer electronics market consists of the total revenues generated through the sale of audio, video, and games console products designed primarily for domestic use. The audio sector consists of wi-fi systems, cassette, CD, Minidisc and MP3recorders and players, personal stereos, and radios. The video sector consists of CRT and flat-panel television sets, videocassette and DVD players and recorders (standalone and integrated with TV sets), camcorders, digital cameras, and set-top boxes. Games consoles consist of all hand-held and plug-in consoles. The market is valued at retail selling price (RSP) with any currency conversions calculated using constant 2006 annual average exchange rates. Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea and Taiwan.

Consumer electronics include electronic equipment intended for everyday use. Consumer electronics are most often used in entertainment, communications and office productivity. Some products classed as consumer electronics include personal computers, telephones, MP3 players, audio equipment, televisions, calculators, GPS automotive navigation systems and playback and recording of video media such as DVDs, VHSs or camcorders. The global consumer electronics industry is dominated by Taiwanese, American, Japanese and Korean companies. Popular brands include Sony, Panasonic, Toshiba, Acer, Asus, View Sonic, Apple, HP, Dell, Samsung, LG and others.

One overriding characteristic of all consumer electronic products is the trend of ever-falling prices. This is driven by gains in manufacturing efficiency and automation, lower labour costs as manufacturing has moved to lower-wage countries, and improvements in semiconductor design. Semiconductor components benefit from Moore's Law, an observed principle which states that, for a given price, semiconductor functionality doubles every 18 months.

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Indian Consumer Electronic Industry

India has an increasingly affluent middle class population that, on the back of rapid economic growth, has made the country’s consumer electronics industry highly dynamic. The industry has been witnessing significant growth in recent years due to several factors, such as retail boom, growing disposable income and availability of easy finance schemes. But still, the consumer electronics goods, like refrigerators, microwave and washing machines have low penetration in the country, representing vast room for future growth.

The consumer electronics market is one of the largest segments in the electronics industry in India. With a market size of Rs.15,897.13 crore ($3.89 billion) in 2006, catering to a population of more than 100 crore people, the consumer electronics industry in India is poised for strong growth in the years to come.

It is predicted that the Indian audio/video consumer electronics industry will grow to Rs.26,931.13 crore ($6.59 billion) by 2011, rising at a Compound Annual Growth Rate (CAGR) of 10.0 per cent from Rs.18,390 crore ($4.5 billion) in 2007.

The growth will be aided by a multitude of factors, including:

Growing consumer confidence due to rising disposable incomes; Easy financing schemes that are making purchases possible; Increased local manufacturing;

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Expanding distribution networks; Sporting events, such as the Cricket World Cup.

Television continues to be the mainstay of the consumer electronics industry in India with the transition slowly occurring to newer technologies such as LCD and PDP.

Industry Trends in Consumer Electronics

The analogue-to-digital conversion has introduced many new standards in audio and video, which greatly improves the quality and affordability of the multimedia digital experience. Further, with the proliferation of broadband, accessing the media has become easy and rewarding for consumers. With easy access and the rich quality enabled by the digital revolution, the following consumer electronic trends are emerging:

In-Home Entertainment: With prices of flat-panel TVs (LCD, Plasma, and DLP) falling more than 30 percent a year, large screen HDTVs are showing up in more and more homes. With homes equipped with HDTVs, and high-definition (HD) content available through broadband, terrestrial, cable, and satellite, consumers now enjoy the complete theatre experience in the

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convenience of their homes. HDTVs will become more main stream with the imminent availability of HD content and DVD players.

Staying Connected: within a home and while travelling, consumers want to stay connected. Historically, they used their laptops for accessing email and the Internet. However, with terrestrial and mobile broadcast services for handheld devices becoming common and broadband wireless connectivity (WiFi and WiMAX) becoming ubiquitous, mobile devices such as cell phones, PDAs, and portable media players are being used to access audio, video, and data. Providers of these mobile devices are constantly updating their technology features to keep up with consumer demand.

Media and Data Convergence: traditionally, there were data-centric devices such as PCs and PDAs and media-centric devices such as TVs and portable media players. However, the line between them is becoming blurry because consumers are demanding products that can handle both. The new generation of consumer gadgets must handle both media and data on the same platform. Such convergence is driving many traditional data-centric companies such as Microsoft and Cisco to enter the consumer market, creating fierce competition for traditional consumer brands.

Propelled by growing middle class population, changing lifestyle and rapid urbanization, the Indian consumer electronics industry is forecasted to grow at a rapid rate of 10% to 12% in the coming few years.

Volume sales of washing machine will be driven by growth in fully automatic category during 2008-09 to 2011-12.

The market for televisions in India is changing rapidly from the conventional CRT technology to Flat Panel Display Televisions (FPTV). Currently, the split between CRT and FPTV is around 97% and 3% respectively, and the share of FPTV is projected to increase at robust rate in near future.

Frost-free refrigerator sales, certainly growing at a much faster pace than the direct-cool category, are anticipated to drive the Indian refrigerators market over the forecast period.

The AC market in India is projected to grow at 30% to 35% for the coming few years.

Driven by young population, demand for MP3 players and digital video appliances are anticipated to surge at double-digit rate in near future.

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The low penetration level of consumer electronics goods coupled with increasing preference for comfort and luxurious goods are widely attracting the foreign as well as domestic players to the industry.

These trends indicate that the consumer electronics market is in a rapid evolution phase and the manufacturers are under tremendous competitive pressure to be first-to-market with unique and differentiated products. However, a successful product in the consumer market quickly attracts copycat products from the competition, leading to rapid price erosion. To stay ahead of the competition, consumer manufacturers are forced to constantly enhance their products or support emerging technologies. For these reasons, we are seeing a dramatic reduction in the consumer product life cycle.

Increased customisation to suit domestic demand

Companies are focusing on customising products to suit Indian tastes, thereby creating a niche for themselves. Several companies are conducting market research in order to understand the psyche of an Indian consumer. The inputs from this research are determining product attributes and pricing and accordingly are achieving better acceptance among consumers.

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By conducting consumer research, companies are trying to identify customer requirements, thereby incorporating specific design elements into their products. For example, LG in 2006 launched a range of TVs from 21 inches to 29 inches in size that were designed based on the company's research on consumer preferences for television sets.

Expanded distribution is critical

In order to tap semi-urban and rural demand, companies are expanding their distribution networks in these areas. The move has positively impacted sales for companies opting for rural expansion.However, rural consumers have not been as brand-conscious as their urban counterparts. Due to the lower prices of unbranded products, rural consumers have been inclined to buy these products, although they often have poor quality. As the awareness among rural consumers rises, they are expected to show a preference for branded products. This is reflected by the fact that established players are reporting higher sales of products in rural areas.

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Market Segmentation I

Sales of video equipment form the most lucrative segment of the Indian consumer Electronics market, accounting for 80.8% of total revenues. Audio equipment sales generate further 14.9% of the market value.

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Market Segmentation II

India accounts for 6.9% of the Asia-Pacific consumer electronics market's value.The most lucrative market in the region is Japan, which generates 37.5% of the totalRevenues.

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Domestic manufacturing to expand

Although electronics production has remained a miniscule portion of overall Indian manufacturing for a long time, the trend is gradually changing. The government has been focusing increasingly on developing the manufacturing sector by developing infrastructure, rationalising duties and creating export-promotion zones. This is in alignment with India figuring into the plans of several companies that want to cater to the domestic and export markets.

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Demand Forecasting

Meaning of demand forecast

A demand forecast is the prediction of what will happen to your company's existing product sales. It would be best to determine the demand forecast using a multi-functional approach. The inputs from sales and marketing, finance, and production should be considered. The final demand forecast is the consensus of all participating managers. You may also want to put up a Sales and Operations Planning group composed of representatives from the different departments that will be tasked to prepare the demand forecast.

Determination of the demand forecasts is done through the following steps:

• Determine the use of the forecast• Select the items to be forecast• Determine the time horizon of the forecast• Select the forecasting model(s)• Gather the data• Make the forecast• Validate and implement results

Purpose of demand forecasting

The purpose of demand forecasting differs according to the type of forecasting.

1. Short term forecasting 2. Long term forecasting

Purpose of short term forecasting

It is difficult to define short run for a firm because its duration mat differ according to the nature of the commodity. For a highly sophisticated automatic plant 3 months time may be considered as short run while for another plant the duration may extend to 6 months or one year. Time duration may be set for demand forecasting depending upon how frequent the fluctuations in demand are. Short term forecasting can be undertaken by the firm for the following purposes:

Appropriate scheduling of production to avoid problems of over production and under-production.

Proper management of inventories, i.e. purchasing raw material at appropriate time when their prices are low, and avoiding over-stocking.

Evolving suitable price strategy to maintain consistent sales.

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Formulating a suitable sales strategy in accordance with the changing pattern of demand and extent of competition among the firms.

Forecasting financial requirement for the short period.

Purpose of long term forecasting

Planning of a new project, expansion and modernization of an existing unit, diversification and technological up gradation.

Planning long term financial requirement. As planning for raising funds requires considerable advance notice, long term sales forecasts are quite essential to access long term financial requirement.

Planning man power requirements. Training and personnel development are long term propositions, taking considerable time to complete .They can be started well in advance only on the basis of estimates of manpower requirement assessed according to long term sales forecasts.

Quantitative Forecasting Methods

There are two forecasting models here – (1) the time series model and (2) the causal model. A time series is a set of evenly spaced numerical data and is obtained by observing responses at regular time periods. In the time series model, the forecast is based only on past values and assumes that factors that influence the past, the present and the future sales of your products will continue.

On the other hand, t he causal model uses a mathematical technique known as the regression analysis that relates a dependent variable (for example, demand) to an independent variable (for example, price, advertisement, etc.) in the form of a linear equation. The time series forecasting methods are described below:

Time Series Forecasting Method Description

Naïve Approach Assumes that demand in the next period is the same as demand in most recent period; demand pattern may not always be that stable

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For example:

If July sales were 50, then Augusts sales will also be 50

Exponential Smoothing

The exponential smoothing is an averaging method that reacts more strongly to recent changes in demand by assigning a smoothing constant to the most recent data more strongly; useful if recent changes in data are the results of actual change (e.g., seasonal pattern) instead of just random fluctuations

F t + 1 = a D t + (1 - a ) F t

Where

F t + 1 = the forecast for the next period

D t = actual demand in the present period

F t = the previously determined forecast for the present period

• = a weighting factor referred to as the smoothing constant

Time Series Decomposition

The time series decomposition adjusts the seasonality by multiplying the normal forecast by a seasonal factor.

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The time horizon of the forecast is classified as follows:-

Description Forecast Horizon

Range Short-range Medium-range

Long -range

Duration

Usually less than 3 months, maximum of 1 year

3 months to 3 years More than 3 years

Applicability

Job scheduling, worker assignments

Sales and production planning, budgeting

New product development, facilities planning

Qualitative Forecasting Methods

A company may wish to try any of the qualitative forecasting methods below if they do not have historical data on the products' sales.

Qualitative Method Description

Jury of executive opinion

The opinions of a small group of high-level managers are pooled and together they estimate demand. The group uses their managerial experience, and in some cases, combines the results of statistical models.

Sales force composite

Each salesperson (for example for a territorial coverage) is asked to project their sales. Since the salesperson is the one closest to the marketplace, he has the capacity to know what the customer wants. These projections are then combined at the municipal, provincial and regional levels.

Delphi method A panel of experts is identified where an expert could be a decision maker, an ordinary employee, or an industry expert. Each of them will be asked individually for their estimate of the demand. An iterative process is conducted until the experts have reached a consensus.

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Consumer market survey

The customers are asked about their purchasing plans and their projected buying behaviour. A large number of respondents is needed here to be able to generalize certain results.

Trend Projection Method: Output and sales of a firm may increase or decrease over a period of time .However, it has a distinct tendency either to increase or decrease in the long run. Such long run tendency of a time series to increase or decrease over a period of time is known as trend.

Graphic Method: This is the simplest technique to determine the trend. All the value s of output or sales foe different years are plotted on a graph and a smooth freehand curve is drawn passing through as many points as possible. The direction of this freehand curve –upward or downward-shows the trend.

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Consumer electronics industry market forecast 2006 – 2011

Domestic consumption is reaching significant size to trigger manufacturing in the electronics sector. India also is assuming a significant place in the global plans of several major electronics manufacturers, thereby positioning it also as an export base.

Demand forecasting of consumer durables Overall Demand Forecasting based on Consumer Survey

The February 18-25 survey of 4,427 consumers looked at a range of popular gadgets in the consumer electronics industry, including digital cameras, iPods and video game consoles. Only 19% of survey respondents say they'll spend more on electronics over the next 90 dayscompared to 33% who will spend less – an unprecedented sign of weakness in the consumer electronics space.

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Colour Television Fig (i) shows the CTV sales in India from 2003 to 2008.The forecast for 2009 can be found by the following forecasting methods:

Moving Average

Moving Average = (Sum of the most recent n data values)/n

To Illustrate the moving average method, consider the sales figures w.r.t Fig (i). Here we take a two year moving average. The moving average calculation for the first two years for the time series is

Moving average = (8.5+9.25)/2

The moving average as the forecast for the third year i.e. 2005 is then taken. Because the actual values observed in 2005 is 10.25, the forecast error for 2005 is obtained by finding the difference between the observed value of the time series and the forecast.

The calculation for the second two year moving average is

Moving average= (9.25+10.25)/2 .Thus the calculated result is as follows:

YearTime Series Value

Moving Average Forecast Forecast Error

Squared Forecast Error

2003 8.5 2004 9.25 2005 10.25 8.875 1.375 1.8906252006 11.75 9.75 2 4

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Year

Sales Figures(in million No’s)

2003 8.52004 9.252005 10.252006 11.752007 14.52008 16.5


2007 14.5 11 3.5 12.252008 16.5 13.125 3.375 11.390625 Total 29.53125

One variation to this method is the weighted moving averages which involves selecting a different weight for each data value and the computing the weighted average of the most recent n values.

Forecast for 2009=((11.75*(1/6))+(14.5*(2/6))+(16.5*(3/6)))= 15.041

Exponential Smoothing

This is a special case of the weighted moving averages method in which we select only one weight---the weight for the most recent observation. The basic exponential model is as follows:

Ft+1= aY1 +( 1-a)F1

WhereFt+1= forecast of the time series for the period t+1Yt= actual value of the time series in period tFt= forecast of the time series for the period ta = smoothing constant

To illustrate the forecast for 2006,F4= 0.2 *10.25 + 0.8* 8.875 =8.97Where 0.2 and 0.8 are smoothing constants and 10.25 and 8.875 is time series value and moving average forecast for 2005.Similarly we calculate the remaning as:

Thus the forecast for 2009 = (0.2*16.5)+ (0.8*10.52) =11.71

Trend Projection Method

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Year(t)Time Series Value(Yt)

Exponential Forecast(Ft)

Forecast Error(Yt-Ft)

2003 8.5 2004 9.25 8.5 0.752005 10.25 8.65 1.62006 11.75 8.97 2.782007 14.5 9.526 4.9742008 16.5 10.5208 5.9792


Through trend projection method we can forecast a time series that has a long term trend. The trend component should reflect the gradual shifting-in this case growth of the time series valuesEquation for linear trend

Tt = b0 + b1t

Tt = trend value of the time series in the period tb0 = intercept of the trend lineb1 = slope of the trend linet=time

Computing the slope (b1) and intercept (b0)

b1 = (∑tYt - (∑t∑Yt)/n )/((∑t2 –(∑t)2/n)

b0 = ∑Yt/n –b1∑t/n

Therefore the trend projection is done as:

Sum of t =21 ;Sum of Sales Value Yt =70.75 ; Yt *t = 276.25 ; t^2 =91

Therefore, µt =3.5 µY =11.791

Applying the formula,

b1 =1.64 ; b0 = 6.05

Linear Trend,Tt=6.05+1.64*t

Therefore Trend for year 2009, T6=6.05+1.64*7=17.53

Similarly the demand for other consumer durables can also be predicted

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Year (t)Sales Value(Yt) Yt(t) t^2

1 8.5 8.5 12 9.25 18.5 43 10.25 30.75 94 11.75 47 165 14.5 72.5 256 16.5 99 36


Refrigerator

Moving Average Method




2003 3.7 2004 3.9 2005 4.1 3.8 0.3 0.092006 4.4 4 0.4 0.162007 4.75 4.25 0.5 0.252008 5.5 4.575 0.925 0.855625 Total 1.355625

Therefore, Forecast for 2009=((4.4*(1/6))+(4.75*(2/6))+(5.5*(3/6)))= 5.06

Exponential Smoothening Method

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Year

Sales Figures(in million No’s)

2003 3.72004 3.92005 4.12006 4.42007 4.752008 5.5

Year(t)

Time Series Value(Yt)



2003 3.7 2004 3.9 3.7 0.22005 4.1 3.74 0.362006 4.4 3.812 0.5882007 4.75 3.9296 0.82042008 5.5 4.09368 1.40632


Thus the forecast for 2009 = (0.2*5.5)+ (0.8*4.09) =4.372


Year (t)

Sales Value(Yt) Yt(t) t^2

1 3.7 3.7 12 3.9 7.8 43 4.1 12.3 94 4.4 17.6 165 4.75 23.75 256 5.5 33 36




b1 =.338; b0 = 3.209

Linear Trend,Tt= 3.209+0.338t

Therefore Trend for year 2009, T9=3.209+0.338*7=5.575

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Air Conditioners

YearSales Figures(in million No’s)

2003 12004 1.252005 1.52006 1.852007 2.22008 2.75





2003 1 2004 1.25 2005 1.5 1.125 0.375 0.1406252006 1.85 1.375 0.475 0.2256252007 2.2 1.675 0.525 0.2756252008 2.75 2.025 0.725 0.525625 Total 1.1675

Forecast for 2009=((1.85*(1/6))+(2.2*(2/6))+(2.75*(3/6))) =2.41 Exponential Smoothening

Year(t)Time Series Value(Yt)



2003 1 2004 1.25 1 0.252005 1.5 1.05 0.452006 1.85 1.14 0.712007 2.2 1.282 0.9182008 2.75 1.4656 1.2844

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Thus the Forecast for 2009 = (0.2*2.75)+ (0.8*1.46) =1.718





b1 =.3413 ; b0 = .5633


Therefore Trend for year 2009, T6= 0.5633+0.3413*7=2.9524

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Year (t)Sales Value(Yt) Yt(t) t^2

1 1 1 12 1.25 2.5 43 1.5 4.5 94 1.85 7.4 165 2.2 11 256 2.75 16.5 36


DVD PlayersYear Sales Figures2003 12004 2.52005 4.52006 62007 7.252008 8

Two Year Moving Average


Moving Average Forecast

Forecast Error


2003 1 2004 2.5 2005 4.5 1.75 2.75 7.56252006 6 3.5 2.5 6.252007 7.25 5.25 2 42008 8 6.625 1.375 1.890625 Total 19.70313

Forecast for 2009=((6*(1/6))+(7.25*(2/6))+(8*(3/6))) =7.41

Exponential Smoothening

Year(t)




2003 1 2004 2.5 1 1.52005 4.5 1.3 3.22006 6 1.94 4.062007 7.25 2.752 4.4982008 8 3.6516 4.3484

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Thus the Forecast for 2009 = (0.2*8)+ (0.8*3.65) =4.52


Year (t) Sales Value(Yt) Yt(t) t^21 1 1 12 2.5 5 43 4.5 13.5 94 6 24 165 7.25 36.25 256 8 48 36




b1 =1.4214 ; b0 = .099


Therefore Trend for year 2009, T7= 0.099+1.4214*7=10.044

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Washing MachinesYear Sales Figures2003 1.42004 1.52005 1.72006 1.852007 2.12008 2.25




Forecast Error


2003 1.4 2004 1.5 2005 1.7 1.45 0.25 0.06252006 1.85 1.6 0.25 0.06252007 2.1 1.775 0.325 0.1056252008 2.25 1.975 0.275 0.075625 Total 0.30625

Forecast for 2009=((1.85*(1/6))+(2.1*(2/6))+(2.25*(3/6)))=2.13


Thus the Forecast for 2009 = (0.2*2.25)+ (0.8*1.66) =1.778

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Year(t)




2003 1.4 2004 1.5 1.4 0.12005 1.7 1.42 0.282006 1.85 1.476 0.3742007 2.1 1.5508 0.54922008 2.25 1.66064 0.58936



Year (t)


1 1.4 1.4 12 1.5 3 43 1.7 5.1 94 1.85 7.4 165 2.1 10.5 256 2.25 13.5 36




b1 =0.177 ; b0 = 1.805


Therefore Trend for year 2009, T7= 1.1805+0.177*7= 2.42

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Microwave Oven

YearSales Figures

2003 0.2752004 0.372005 0.52006 0.652007 0.82008 1




Forecast Error


2003 0.275 2004 0.37 2005 0.5 0.3225 0.1775

0.031506

2006 0.65 0.435 0.215

0.046225

2007 0.8 0.575 0.225

0.050625

2008 1 0.725 0.275

0.075625

Total0.203981

Forecast for 2009=((0.65*(1/6))+(.8*(2/6))+(1*(3/6)))= .875


Year(t)




2003 0.275 2004 0.37 0.275 0.095

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2005 0.5 0.294 0.2062006 0.65 0.3352 0.31482007 0.8 0.39816 0.401842008 1 0.478528 0.521472

Thus the Forecast for 2009 = (0.2*1)+ (0.8*.478) =.5824


Year (t)


1 0.275 0.275 12 0.37 0.74 43 0.5 1.5 94 0.65 2.6 165 0.8 4 256 1 6 36


Therefore, µt =3.5 µY =.6

Applying the formula,b1 =0.145 ; b0 = .092


Therefore Trend for year 2009, T7=0.092675+0.14471*7= 1.105

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VISION FOR THE FUTUREIndia has been experiencing a strong growth in the demand of consumer products and durables in recent years, driven by consumer demographic trends. This has facilitated growth in the electronics sector both directly and indirectly. Growth in demand of consumer durables such as CTVs, VCD / MP3 players and PCs directly benefits the sector. Also the demand for products such as automobiles, white goods, air-conditioners, textiles, etc, leads to growth in the electronics sector as these products contain a significant number of electronic components. At the same time, consumer demand has boosted growth in India’s overall manufacturing sector as well, which, in turn, has a positive impact on industrial electronics. On the whole the domestic market in India is very attractive from the point of view of the electronics sector, and current trends indicate high growth potential for the sector in the future.

Some of the key trends that have a positive impact on the sector are: Growing consuming class (defined as people having annual income of US$ 980 (INR

45000) or above) that has greater disposable income and propensity to spend. It has been estimated by

NCAER that this group will constitute over 80 per cent of the population of India by 2009-10

Lifestyle changes such as greater exposure to global trends and increasing affinity for convenience and lifestyle products

Increasing urbanisation, emergence of nuclear double income families Low penetration levels of most consumer durables. For example, in 2002, only 66 per

cent of middle-income households had a TV set, only 28 per cent of the urban households possessed a refrigerator, while just a little over 15 per cent owned an air cooler. Despite a population of more than 1 billion people, only 16 million computers were used in India in March 2005.

Increased government and private industry spending on sectors such as defence and aerospace. The Indian aviation sector, for example, has placed orders for more than 350 aircrafts with a list price of about US$ 26 billion. In recognition of India’s domestic market potential, Samsung has selected India as one of the top six strategic markets in the world along with the US, China, Russia, Germany and Thailand.

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BIBLIOGRAPHY

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