Planning of a new unit and expansion of an existing unit: A firm should have information about long-term demand prospects for his products to make long-term demand of the products. A multi-product firm must ascertain total demand as well as individual demand for different items separately. If a firm has better knowledge than its rivals about growth trends of the aggregate demand and of the distribution of the demand over various products, its competitive position would be much better.
Planning long-term financial requirements: Purpose of long-term planning and for raising funds, it requires considerable advance information. Thus, long-term sales forecasts are quite essential to assess long-term financial requirements.
Planning manpower requirements: Training and personnel development are long term propositions, takes considerable time to complete. They can be started well in advance only on the basis of estimates of manpower requirements assessed according to long term sales forecasts.
Providing guideline for demand forecasts for related industries: Industries are interrelated in different ways. The demand forecasts of particular products can also provide a guideline for demand forecasts for related industries. For example, the demand forecasts for cotton textiles may provide an idea of the likely demand for the textile machine, industry, dyestuff industry, ready made garments industry.
Guiding the government: Macro level forecasts may also help the government in determining whether imports are necessary to meet any possible deficit in the domestic supply or in devising appropriate export promotion policies if there is a surplus product in the domestic market.
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