Sales forecasting

• A sales forecast is a prediction of future sales based on data analysis trends, economic variables, and competitor actions
• To predict future sales a business may use market research, backdata (historical data), seasonal fluctuations to sales
• Factors affecting a sales forecast may be cash flow, staff availability, promotions, purchasing raw materials, economic variables, actions of competitors, consumer trends
• Advantages of a sales forecast may be that you can plan promotions accordingly to reduce slow periods OR maximise good periods, help to plan staff arrangements, helps to purchase raw materials
• Disadvantages of sales forecasting is that historical data may not reflect future performance therefore making the prediction inaccurate, fluctuations in demand need to be taken into consideration, consumer trends + economic variables are volatile and hard to predict
• Sales forecasting is important as it allows businesses to make informed decisions about their marketing strategies, production levels, stock control, staffing requirements, financial planning, and overall business strategy