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Question

When forecasting demand for new products, sometimes firms will use demand data from similar existing products to help forecast demand for the new product. What technique is this an example of?.

Answer

When it comes to demand forecasting for new products, firms often rely on historical analogy, where demand data from similar existing products is used to predict demand for the new product. Demand forecasting is the process of making predictions about future customer demand for a specific period. To ensure the most accurate forecasts, demand forecasting typically involves considering past data as well as other analytical information. The historical analogy approach involves using predictive modeling to analyze historical information and anticipate customer demands, enabling firms to understand important economic conditions and make key supply decisions to maximize profitability. This method is often effective and economical, and is used primarily to forecast demand for a new item by starting with predictions and historical data for related or relevant existing products. For further information on demand forecasting, please visit brainly.com/question/29099714 #SPJ4.