A demand function estimates how much demand a product, service, or activity will receive under specified conditions. In practice, demand models turn available signals into a prediction that supports a business decision. section 6.6.1
Frame a demand-modeling task by:
- Selecting conditions that may change demand, such as forecast weather. section 6.6.1
- Placing the forecast before the prediction so the result can guide an anticipated customer response. section 6.6.1
- Connecting the predicted behavior to an operational question, such as whether customers will cycle or take buses. section 6.6.1
Weather-sensitive travel demand
Use a weather forecast to estimate whether customers will want to cycle or shelter from rain by taking buses. This turns a forecast into a demand-prediction requirement. section 6.6.1
