4.3 - Sales Forcasting (HL) Flashcards
1
Q
Sales Forecasting
A
Predicting the sales volume for a business/product in the future
2
Q
Benefits of Sale Forcasting
A
Help divide production numbers
- Less likely to have unsold stock/hold less stock
HR Planning
- How many employees do we need?
Can help with loan applications
- Predictions may help persuade banks
Cash flow management
- Ensure enough cashflow is on hand
3
Q
Limitations of Sales Forcasting
A
Just a prediction
- Things may change in the future
External factors may change everything
- E.g. recession, Covid-19
Some industries are changing very quickly
- AI company
New businesses don’t have past sales numbers
4
Q
Alternative Ways of Sales Forecasting
A
Based on experience or hunch
- Use the experience of the industry to predict the future
- Intuitive decision making
Look at similar business
- Look at the competition to see sales growth trends
Market Research
- Hire a market research company to do it
- Look a publically available market research
