Component 2 - Sales Forecasting Flashcards
Explain : what is meant by sales forecasting
Sales forecasting is the process of predicting future sales of a product or service, based on past sales data and other relevant information.
Explain : Quantitative and Qualitative Sales Forecasting, with 3 examples of each.
Quantitative - Numerical methods of Forecasting, it can provide accurate predictions based on past data, E.G trend analysis, regression analysis, and time series analysis.
Qualitative - Methods of forecasting sales that involve the use of expert opinion, subjective judgment, and other non-numerical methods, E.G Market research, focus groups, and surveys.
Explain : Calculate, a three-point moving average
Three point moving average - The avaerage of the three numbers
Explain : Create a scatter graph and a line of best fit
Explain : How extrapolation can predict future developments
Extrapolation - A Statistical method of predicting future developments based on past trends and patterns. In business, it involves using historical data to make predictions about things such as future sales, revenue, or market trends.
Explain : What a Time Series Analysis in the context of business is
Time-series analysis - A statistical technique used to identify patterns in data over a specified period of time, which can be useful in identifying trends, forecasting future outcomes, and making strategic decisions.
Explain : The 5 Steps to Interpret information from a time-series analysis
1) Identify the time period
2) Plot the data
3) Analyse the trend: Patterns in the data such as upward or downward trends
4)Evaluate the results: Assess the significance of the trend and what factors may be influencing the trend.
5)Forecast future outcomes: Use the results of the analysis to predict future outcomes or make decisions about the business based on the data.
Explain : Understand that correlation can be
positive, negative or non-existent”
Explain : describe a strength and weakness of intuition as a way of making decisions
Strength
- It is a quick and easy way to make predictions
Weakness
- It may be influenced by personal biases.
Which decision making process does this refer to ?
Making predictions based on personal experience, judgment, and expertise. It is often used when data is scarce or unreliable
Intuition
Explain : Describe a strength and weakness of Brainstorming as a way of making decisions
Strength
- Effective in generating a variety of ideas,
Weakness
- Doesn’t provide a structured approach to analysis or decision-making.
Explain : What is meant by brainstorming, in decision making
Brainstorming is a grouped technique which involves generating ideas and predictions in a creative and unstructured way,
Explain : The Delphi method and A Strength and Weakness of it.
The Delphi Method - A structured, iterative process that involves a panel of experts making predictions based on a series of questionnaires, The experts then provide feedback on each other’s predictions, and the process continues until a consensus is reached.
Strength
- Useful when there is a need for a structured and objective approach to prediction-making, and when a high degree of accuracy is required
Weakness
- Experts could be subject to error.
Explain : What is meant by qualitative forecasting technique
The Qualitative forecasting Method is used to make predictions based on subjective factors, rather than numerical or statistical data.
Evaluate : The usefulness of time-series analysis
for a business and its stakeholders
Evaluate : Evaluate the advantages and disadvantages of using
qualitative forecasting
In general, qualitative forecasting techniques can be useful when there is a lack of numerical data, or when it is difficult to predict future outcomes based solely on historical data. However, they may be less accurate than quantitative techniques, which rely on numerical data and statistical analysis. It is important to consider the strengths and limitations of each technique and to use a combination of methods to make the most informed decisions.
Explain : What a Time Series Analysis in the context of business is
Explain : Explain qualitative forecasting techniques including
, intuition, brainstorming and the Delphi method
