Demand Estimation And Forecasting

In this topic first we should know about demand estimation and forecasting

What is demand estimation?
Demand Estimation - It means the level of demand and variables which determines it.

What is demand forecasting?
Demand forecasting means it is the prediction of future demand or we can say that it is the prediction of over all future demands.

Demand Estimation and forecasting is the process of finding the current values of demand for various values of prices and other determining variables.

The current demand should be known for determining pricing and promotion policies so that it is able to secure optimum sales or maximum profit.It can also be estimates  from consumers point of view or surves.

Example
We can take example of FACEBOOK.
Facebook estimates from public what people actually  wants.What are the features they requires in facebook. They collects data from past records and on that basis estimates and forecast the demands to customers by providing features.