2.2.1 Sales Forecasting

Question 1

Sales forecast

Answer 1

An estimation of future sales that may be based on previous sales figure, sales volumes, trends, market surveys

Question 2

4 purposes for sales forecasting

Answer 2

Finance, people, marketing and resource management

Question 3

Sales forecast importance for finance

Answer 3

How much money the business can expect to flow in from sales, predicts sales revenue and volumes, access ability to break even, helps set budgets, profit and loss forecast

Question 4

Sales forecasting impacting people

Answer 4

Plan workforce’s needs for sales team, seasonal staff in stores, peak time, operatives to ensure supply meets demand

Question 5

Sales forecasting importance in marketing

Answer 5

Identify when promotional activity is needed, plan distribution

Question 6

Sales forecasting impacts resource management

Answer 6

Required levels of output, stock management, can suppliers match demand

Question 7

Factors effecting sales forecasts

Answer 7

Consumer trends - changing assets, market size and structure, shopping habits. Economic variables - changes in disposable income, interest rates, inflation and tax rates. Actions of competitors, natural changes eg weather, changes in costs

Question 8

Difficulties of sales forecasting

Answer 8

Based on past sales data - likely to be inaccurate, real difficulties, unexpected events may lead to cash flow forecasts having to become adapted leading to added finance needed