A toy manufacturer has excellent sales figures for its toys in country P but inadequate figures in the neighboring country R. In country P, per capita consumption is known to increase at a predictable ratio as per capita gross domestic product (GDP) increases. If per capita GDP is known for country R, per capita demand for the toys can be estimated using the relationships established in country R. Which of the following methods of forecasting does this example illustrate?

Question

Quizplus · Accepted Answer

The example illustrates the analogy method of forecasting demand. The analogy method of forecasting demand assumes that demand for a product develops in much the same way in all countries, as comparable economic development occurs in each country.

A Toy Manufacturer Has Excellent Sales Figures for Its Toys