2.2.1 Sales forecasting

Question 1

Give the definition of sales forecasting

Answer 1

Sales forecasting involves predicting future sales volume to inform key decisions

Question 2

What are factors affecting sales forecasting

Answer 2

• Actions of competitors
• Economic variables
• Consumer trends

Question 3

How can actions of competitors affect sales forecasts?

Answer 3

• Competitors releasing promotions or introducing new pricing strategies

Question 4

How can economic variables affect sales forecasts

Answer 4

• Inflation may lead to uncertainty in consumers, Low int rates leads to cheaper borrowing and higher unemployment leads to lower consumption

Question 5

How do consumer trends affect sales forecasting

Answer 5

• Rapid changes in demand or different buying habits

Question 6

What are some advantages of sales forecasting

Answer 6

Helps to make key decisions such as staffing, promotions and raw materials

Question 7

What are some disadvantages of sales forecasting

Answer 7

• Consumer and economic trends may be volatile
• Data may not be accurate which they have used