2.2.1 Sales Forecasting

• Sales Forecast

  Predicting future sales in a given period using statistical methods
• Purpose of Sales Forecasts

  -Plan HR eg. more staff needed if sales rise

  -Determine cash flow forecast

  -Determine profit forecasts

  -Production scheduling depends on the output needed
• Factors Affecting Sales Forecasts

  Consumer trends, economic variables and actions of competitors
• Consumer Trends (medium to long-term)

  -Changing tastes and habits eg. healthy eating

  -Demographics eg. ageing population

  -Globalisation eg. Mexican food

  -Affluence/ wealth
• Economic Variables

  -A fall in the pound boost sales for UK goods

  -Introduction of a new tax

  -Inflation

  -A change in real incomes
• Actions of Competitors


  If the actions of competitors impact sales other firms will attempt to counteract this
• Factors in Successful Forecasting

  Accurate: If the product has naturally stable sales or is long established so easy to predict

  Inaccurate: New firms have no historical data, sales vary with weather, the owner is optimistic