2.2.1 sales forecast

Question 1

what are the 3 factors affecting sales forecast?

Answer 1

1. Market trend
2. Seasonality
3. Competition

Question 2

what are the 2 purposes of sale forecasts?

Answer 2

1. A business can use sales forecasts to see if it will need to increase its productive capacity.
2. Forecasting sets sales targets providing clear goals for sales teams to aim for.

Question 3

what are market, seasonality and competition defined as factors affecting sales forecast?

Answer 3

-Market-trend: look at what’s happening in the market. Are there new products? Changes in technology? Trends can tell you if more or fewer people will want to buy.
-seasonality: think about how some products sell better at certain times, e.g., ice cream in summer. Knowing these patterns helps predict sales better.
competition: keep an eye on your competitors. Launching something new or having a big sale might affect your sales. Understanding their moves helps you adjust your forecast.

Question 4

what are the 3 difficulties of sales forecasting?

Answer 4

1. competitors can change their strategies suddenly with promotions or new products which can impact your sales forecast.
2. natural disasters cannot be foreseen.
3. a new business will not have historical data to look at and will have to use research data.