4.3 Sales forecasting

• Extrapolation is using past data and extending the trend to predict future sales.
• Market research is identifying and forecasting the buying habits of consumers.
• Times series analysis is predicting sales levels by identifying the underlying trend from a sequence of actual sales figures factoring in seasonal variations, random variations and cyclical variations.
• Seasonal variations are based on the time of the year.
• Random variations are based on unpredictable events.
• Cyclical variations are from economic booms and slumps.