3.3.1 Quantitative sales forecasting

Question 1

How do you calculate the average 3 period?

Answer 1

add up 3 months / 3

Question 2

How do you calculate the average 4 period?

Answer 2

add up 4 months / 4

Question 3

What is the difference between a moving total and moving average?

Answer 3

Moving total is when you just add the numbers. Average is when you also divide them.

Question 4

What can be done to a line of best fit?

Answer 4

A line of best fit can be drawn to smooth out data and it can be extrapolated to predict future sales.

Question 5

What is the limitations of quantitative sales forecasting?

Answer 5

1. short term- data loses value over 1-2 years
2. Doesn’t take into account external shocks and doesn’t tell you how to deal with them
3. based of historic data which is not always going to repeat itself
4. Less valuable in dynamic markets