2.2.1 Sales forecasting

Question 1

what is sales forecasting?

Answer 1

it estimates the volume/value of future sales using market research or past sales data

Question 2

what are the uses of sales forecasting?

Answer 2

-to avoid cash flow problems
-to free up management time
(can prepare in advance)
-to manage production capacity
-to employ more workers
(when demand is high)
-to start a promotional activity (advertising)

Question 3

what factors affect sales forecasting?

Answer 3

-consumer trends
-economic variables
-actions of competitors

Question 4

what are the drawbacks of sales forecasting?

Answer 4

-historical data may not reflect future performance
-natural disasters can’t be foreseen
-fluctuations in demand