sales forecasting

    Cards (13)

    • what is sales forecasting?
      its the business process of predicting how mucg revenue the business will generate within a specific time frame
    • what does a sales forecast help with?
      • how much stock to buy and hold
      • how many staff are needed
      • most appropriate marketing strategy
      • if theyll break even
    • what is the purpose of sales forecasting?
      • finance
      • people
      • marketing
      • resource management
      • planning distribution and delivery
    • finance purpose
      • informs cash flow forecast
      • predicts sales volumes and revenue
      • asses ability to break even
      • inform profit and loss forecast
    • people purpose
      • planning workforce
      • plan for peak times
      • ensure supply meets demand
    • marketing purpose
      • identify when promotional activity is needed
    • resource management purpose
      • to know the required levels of output
      • stock management
      • to know wether suppliers can meet demand
    • planning distribution purpose
      • ensuring the right products are available at the right locations and times
      • aligning inventory levels with predicted demand
    • how to forecast sales?
      use historical sales data to identify future sales. this is called extrapolation
    • sales forecast formula
      (final year sales  first year sales number of years )+\left(\frac{final\ year\ sales\ -\ first\ year\ sales\ }{number\ of\ years\ }\right)+final year sales final\ year\ sales\
    • 4 compenants to time series data
      1. trends
      2. seasonal fluctuations
      3. cyclical fluctuations
      4. random fluctuations
    • difficulties of sales forecasting:
      • to much data
      • interpretation, bias opinion
      • future doesnt always mirror the past
    • economic variables:
      • interest rates
      • infatuation
      • exchange rates
      • unemployment
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