2.2.1. Sales Forecasting

Question 1

Purpose of sales forecasts

Answer 1

To predict future revenues based on past sales figures
-Production planning, HR plan

Question 2

Factors affecting sales forecasting

Answer 2

1.Consumer trends:Demographics, globalisation
2.Economic variables:Value of £ (Decrease value makes imports more expensive), changes in taxation, inflation
3.Actions of competitors: Changing price, launching new products, promotional campaigns

Question 3

Difficulties of sales forecasting

Answer 3

• use of extrapolation means assuming past trends will continue however past trends can change. Spot future change in trends that may seem impossible to find