Economic Principles and Demand Forecasting

12 important questions on Economic Principles and Demand Forecasting

What are opportunity cost?

the loss of opportunity of taking any alternative action given the same time & resources.

What is a shortage?

Quantity demanded exceeds the quantity (more buyers than goods, increase the price)

What means perishable good/service ?

If the product is not sold within a given time or period, that product can't be sold later.
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What is Propensity of purchase

: the profitability of purchasing an organization's products/services in the future

Weak season/valley season/offs-season?

season with lowest demand

What is Demand forecasting?

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  • act of estimating, calculating and predicting consumer’s demand for products/services in the future

What are the steps for demand forecasting?

Step 1. Determine overall demand for market
Step 2. Create list demand generations
Step 3. Check date-specific demand generators
Step 4. Lock back to the past
Step 5. Make calendar of all mentioned steps + check booking pace

What is a Demand generator?

an activity/entity that produces demand

What are Demand drainers?

an activity or event that causes demand decrease (holiday for example brings less business guests)/ inclement weather (less cycles etc)

What is a Stay pattern?

patter in arrival day, number of nights stayed and departure day guest.

What is Constrained demand?

demand that is held back or confined by rules, restrictions & availability (for example book a flight with frequent flyer card)

What is Unconstrained demand?

naturally occurring demand that occurs in the absence of restraints & restrictions.

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