2.2.1 Sales Forecasting

    Cards (14)

    • What is the purpose of sales forecasting in business planning?
      To predict the quantity of a product a business is likely to sell
    • How can sales forecasts help a business calculate its sales revenue?
      By coupling predicted sales quantity with the selling price of products
    • Why is profit forecasting important for businesses?
      Because profit is the main objective for most businesses
    • How does sales forecasting assist with cash flow forecasting?
      It provides the biggest cash inflow for a business
    • In what way can sales forecasts influence staffing and human resource plans?
      The more sales expected, the more staff required to produce output
    • Why is it important for a business to meet demand with supply?
      To ensure that consumer demand for a product can be satisfied
    • What factors can affect the accuracy of a sales forecast?
      Consumer trends, economic variables, and competitor actions
    • How can consumer trends impact sales forecasts?
      Changes in demographics and consumer preferences can alter demand
    • What economic variable can lead to uncertainty in consumer spending?
      Inflation
    • How can falling interest rates affect consumer spending?
      They can encourage consumers to spend more due to cheaper borrowing
    • What happens to consumer spending when unemployment rises?
      People's income falls, leading to decreased spending
    • How can competitor actions influence a business's sales forecast?
      Competitors' promotional campaigns or price cuts can shift consumer preferences
    • What is extrapolation in the context of sales forecasting?
      Using past trends to predict future sales
    • If a product's sales have been growing rapidly, what might happen in the future according to its product life cycle?
      It may reach maturity and then decline
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