Extrapolation + moving average advan+disad

• • Helps the business to plan
• • Helps financial planning, including cashflow management
• • Can help with production planning, e.g. ordering in the correct number of raw materials
• • Human resource planning, getting the right number and type of staff in the jobs that are needed
• • May motivate managers to reach targets
• Disadvantages:

  • Uses information from the past and does not consider what might happen in the future (such as economy may go into recession, supplies of raw materials might be disrupted ect)
• • It can only be useful when sales have been stable with no major upsets.
  • It is only accurate as the information is collected
  • It assumes that consumers will maintain their buying habits
  • Does not account for qualitative issues