2.2.1 sales forcasting Flashcards
1
Q
sales forcasting
A
an estimate of expected sales revenue within a specific time frame, such as quarterly, monthly, or yearly
2
Q
3 methods of sales forcasting
A
- extrapolation
- correlation
- confidence intervals
3
Q
advantages of extrapolation
A
- simple method of forcasting
- not much data required
- quick + cheap
4
Q
disadvantages of extrapolation
A
- unreliable if there significant fluctuations in historical data
- assumes past trend will continue in the future
- ignores qualitative factors
5
Q
why would you forcast
A
- stock control (supply chain)/ know demand
- derive of aims/obj
- financial impact
- capacity utilisation
- HR strategy
6
Q
9 factors affecting sales forcasting
A
- seasonality
- demand (tastes/trends change)
- nature of product (essential/luxury)(market -dynamic)
- competitors (close substitute)
- external factors
- economic variables
- changes in price and promotion
7
Q
economic variable
A
- any measurement that helps to determine how an economy functions
8
Q
how do you measure size of economy?
A
GDP (interest rates)
inflation
unemployment
deprivation rate
exchange rate
9
Q
income elasticity
A
- measure sensitivity of demand to changes in consumer income
10
Q
normal good
A
- one with a positive relationship between income and demand e.g. bottled water (income + = demand +)
11
Q
inferior good
A
- one with a negative relationship between income & demand e.g. supermarket own brand (income + = demand - afford more luxurious)
12
Q
tax
A
- duty charged by government
- direct; income
- indirect; spend
13
Q
confidence intervals
A
helps a business evauluate the reliabilityof a particular estimate
14
Q
examples of confidence intervals
A
- quality management
- market research
- risk management & contingency planning
- budgeting + forcasting
15
Q
circumstances where sales forcasts are likely to be inaccurate
A
- new business
- disruption to market
- highly sensitive demand- product is a fashion item
