2.2.1 Sales Forecasting

• What is the definition of sales forecasting?

  Estimating future sales
• Sales forecasting involves analyzing historical data and current market trends
• Sales forecasting aims to provide accurate estimates for better financial planning.
• What are two key benefits of sales forecasting?

  Inventory management, resource allocation
• Sales forecasting can be qualitative or quantitative
• Match the forecasting method with its description:

  Qualitative ↔️ Relies on expert opinion and subjective judgment.

  Quantitative ↔️ Uses statistical models and historical data.
• Qualitative forecasting is useful when historical data is scarce.
• What is a weakness of quantitative forecasting?

  May not account for unexpected events
• Sales forecasting is crucial for financial planning
• Sales forecasting helps optimize stock levels to reduce overstocking and stockouts.
• How does accurate sales forecasting enhance profitability?

  Improves cost control and maximizes revenue
• Match the forecasting method with its key input:

  Qualitative ↔️ Expert opinions and market surveys

  Quantitative ↔️ Historical sales data and market trends
• The Delphi method gathers opinions from a panel of experts anonymously and iteratively
• What does the sales force composite method rely on to forecast sales?

  Customer interactions
• Qualitative forecasting is objective and data-driven.

  False
• The regression equation used in quantitative forecasting is $y =$$ax +$$b$, where $y$ represents the forecasted sales
• What is the definition of sales forecasting?

  Estimating future sales
• Sales forecasting aims for accurate estimates to improve financial planning
• What are the two main methods of sales forecasting?

  Qualitative and quantitative
• Qualitative forecasting relies on statistical models and historical data.

  False
• What is a key strength of quantitative forecasting?

  Objective and data-driven
• Sales forecasting helps businesses create realistic budgets
• Match the benefit of sales forecasting with its description:

  Budgeting ↔️ Estimates future revenue

  Inventory Management ↔️ Reduces overstocking

  Production Planning ↔️ Aligns schedules with demand
• Order the following qualitative forecasting techniques from least to most data-driven:

  1️⃣ Executive Opinion

  2️⃣ Sales Force Composite

  3️⃣ Market Surveys

  4️⃣ Delphi Method
• Which qualitative technique compiles forecasts from individual sales representatives?

  Sales Force Composite
• The Delphi method mitigates group bias by anonymously sharing expert opinions.
• What do quantitative forecasting techniques rely on to predict future sales?

  Historical data and models
• Time series models analyze time-ordered sales data to identify trends, seasonality, and cycles
• What is the purpose of moving averages in forecasting?

  Smoothing time series data
• Moving averages account for seasonality and external factors.

  False
• What is the goal of time series analysis?

  Identify data patterns
• Match the component of time series analysis with its description:

  Trend ↔️ Long-term increase or decrease

  Seasonality ↔️ Regular variations within a year

  Random Variation ↔️ Unpredictable fluctuations
• What is the primary goal of sales forecasting?

  Accurate estimates
• Quantitative forecasting uses statistical models and historical data
• Qualitative forecasting is useful when historical data is scarce.
• Match the forecasting method with its key input:

  Qualitative ↔️ Expert opinions

  Quantitative ↔️ Statistical models
• Quantitative forecasting requires sufficient data
• Qualitative forecasting is biased but data-driven.

  False
• What is an example of a statistical model used in quantitative forecasting?

  Regression equation
• Accurate sales forecasts ensure realistic budget creation