2.2.1 sales forecasting Flashcards
what are the purposes of sales forecasting
to show:
hr plan
production plan
profit forecasts
budgets
what is an hr plan
a document that shows how many people are currently employed in a company, ensures there are no shortages or surpluses of employees.
why does a sales forecast need to show an hr plan
if the sales forecasts predicts high sales in a certain period then more temporary employees may be needed to cope with the demand, and less employees may be needed if sales forecasts are low
a document that shows how many people are currently employed in a company, ensures there are no shortages or surpluses of employees
hr plan
a document that shows how many people are currently employed in a company, ensures there are no shortages or surpluses of employees
hr plan
what factors affect sales forecast
action of competitors
economic variables
consumer trends
seasonality
how do economic variables affect sales forecasts
if the economy was in a recession or inflation was high then demand fdor products would decrease, meaning a business will have less sales
how do consumer trends affect sales forecast
it will affect the demand for certain products
why is it important to show production planning in a sales forecast
during periods of high sales it is important that the business has ebough raw materials to make the products, the sales forecast will allow a business to see which months will have high sales.
how will competition affect sales forecasts
-they may launch new improved products and attract customers, this may reduce a businesses sales
-they may reduce their product prices, meaning customers are more likely to purchase their products, a business can either reduce prices as well or decrease their sales forecasts
what are the difficulties with sales forecasts
-a new business will be unable to use them as they have no previous sales
-businesses in a dynamic market will find it hard to predict sales
-may get inaccurate sales forecasts
what is the definition for sales forecast
the prediction of the total future sales
what are the advantages of sales forecasts
-Gives the business an idea of what the inflows will be so they can plan for the
outflows
how does seasonality affect sales forecasts
during certain periods in the year, some products arent needed as much compared to other months
e.g gloves and coats will receive less sales during summer compared to winter
what are consumer trends
The habits or behaviours of consumers that determine the goods and services they buy
