2.2.1 Sales Forecasting

Question 1

What is sales forecasting?

Answer 1

The prediction of future sales, volumes and trends.

Question 2

What is the purpose of sales forecasting?

Answer 2

Inform the cash flow forecast
Predict sales volume and revenue
Assess the ability to break even
Help set budgets
Identify promotional activities
Plan distribution

Question 3

What is time series data?

Answer 3

A method that allows a business to predict future levels from past figures.

Question 4

What is time series analysis?

Answer 4

It assumes that past figures are an useful indicator and are likely to be the case if trading conditions are stable

Question 5

Factors affecting sales forecast?

Answer 5

Consumer trends
Economic variables
Actions of competitors

Question 6

Benefits of sales forecast?

Answer 6

Helps the business to plan ahead and avoids surpluses
It gives a clear idea of cash inflow.
It allows to plan order supplies and component.
It ensures that it has the correct staffing levels
It ensures that it has the capacity to meet projected order