3.3.1 quantitative sales forecasting

Question 1

define quantitative sales forecasting

Answer 1

estimating possible future sales figures on the basis of primary or secondary quantitative data

Question 2

three main methods of providing quantitative sales forecast

Answer 2

moving averages
extrapolation
correlation

Question 3

define moving averages

Answer 3

takes a data series and smoothes the fluctuations in data to show an average.
aim is to take out the extremes of data from period to period

Question 4

define extrapolation

Answer 4

uses trends established from historical data to forecast the future

Question 5

calculating moving averages

Answer 5

add the selection of three figures together
divide the moving total by 3
line of best fit
extrapolate to forecast sales
calculate cyclical variation = actual sales - moving average sales

Question 6

define correlation

Answer 6

looks at the strength of a relationship between two variables

Question 7

independent variable

Answer 7

factor that causes the dependent variable to change

Question 8

dependent variable

Answer 8

variable that is influenced by the independent variable

Question 9

positive correlation

Answer 9

exists where as the independent variable increases in value, so does the dependent variable

Question 10

negative correlation

Answer 10

exists where as the independent variable increases in value, the dependent variable falls in value

Question 11

no correlation

Answer 11

no discernible relationship between the independent and dependent variable

Question 12

limitations of quantitative sales forecasting techniques

Answer 12

past performance is no guarantee of the future.
businesses need to appreciate the swot and nestle factors that may affect future predictions