Chapter 4.3 - Sales Forecasting

Question 1

Correlation

Answer 1

Shows the degree to which two sets of numbers or variables are related, e.g. Sales revenue over a period of time. Marketers are interested in establishing a strong correlation between. Marketing expenditure and sales growth

Question 2

Cyclical variations

Answer 2

Are recurrent fluctuations in sales linked to the economic cycle of booms and slumps. Unlike seasonal variations, cyclical variations can last longer than a year

Question 3

Extrapolation

Answer 3

Is a forecasting technique used to identify the trend by using past data and extending this trend to predict future sales

Question 4

Moving Averages

Answer 4

Are used to find underlying trends by smoothing out variations. It is common to use up to four-part moving averages, i.e. averaging sales figures for four consecutive time periods

Question 5

Sales Forecasting

Answer 5

Is a quantitative management technique used to predict a firm’s level of sales over a given time period

Question 6

Seasonal Variations

Answer 6

Are periodic fluctuations in sales revenues over a specified time period, such as certain mon this or quarters of the year

Question 7

Random Variations

Answer 7

Are unpredictable fluctuations in sales revenues caused by erratic and irregular factors that cannot be practically anticipated

Question 8

Time Series Analysis

Answer 8

Is a sales forecasting technique that attempts to predict sales levels by indie tidying the underlying trend from a sequence of actual sales figures