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  • Print publication year: 2005
  • Online publication date: June 2012

PART II - DEMAND ANALYSIS

Summary

Part II (Chapters 3 and 4) examines the topic of demand. The demand for a firm's products determines its revenues and also enables the firm to plan its production; thus a thorough understanding of demand by managers is fundamental to a firm's profitability. Chapter 3 is concerned with the factors that determine demand, both those that are controllable by the firm and those that are uncontrollable, or environmental. The sensitivity of demand to these factors is examined, and also how knowledge of this sensitivity is useful to managers. Chapter 4 is concerned with the estimation of demand, examining techniques for estimating and interpreting demand relationships, and using such relationships for forecasting purposes. The use of statistical methods is explained in particular. Finally, important results from empirical studies are discussed.