Sales forecast

• What is the definition of sales forecasting?

  Predicting future sales using previous sales or research
• Give 5 purposes of sales forecasts?

  Avoid cash flow problems

  Frees up management time

  Production capacity

  Employ more workers

  Start promotional activity
• How does sales forecast help avoid cash flow problems?

  Helps to manage production , staff and financing more effectively
• How does sales forecasts free up management time ?

  Allows the business to spend more time develop the business than responding to day to day developments
• How does sales forecasts help with production capacity ?

  Helps the business to estimate if they need to decrease or increase production - see if they have capacity to deal with expected demand
• How does sales forecasts help to employ new workers?

  Helps a business to see how many employees they need to cope with new level of demand
• How does sales forecasts help start promotional activity?

  Business may decide to increase sales through promotion if sales forecasts are low
• Give 3 factors that affects sales forecasts?

  Consumer trends

  Economic variables

  Action of competitors
• How do consumer trends affect sales forecasts?

  documents can help a business to identify a upcoming trend and research popular products
• How do economic variables affect sales forecasts?

  It can affect how a business plans its sales like interest rates, inflation rates and unemployment rate
• How does action of competitors affect sales forecasts?

  If a business is facing decline due to competitors superior product then they may try to produce or sell less of those products
• Give 2 ways how you can analyse a sales forecast?

  Time series data

  Trends
• What is time series data?

  The sales revenue in time order to enable predictions based upon past data
• What is meant by trend?

  A general direction in what is popular