quantitative sales forecasting

Question 1

calculation of time series analysis

Answer 1

moving average: sales in that time period/how many years or months

e.g sales from 2006,2007,2008: 125 + 130 + 130

125+130+130/3 years

^3 year average

Question 2

what is time series analysis?

Answer 2

a method that allows a business to predict future levels from past figures

Question 3

four main components of time series data

Answer 3

cyclical fluctuations

seasonal fluctuations

random fluctuations

trend

Question 4

limitations of quantitative sales forecast

Answer 4

past may not mean this is going to happen in the future

only useful when :
- forecast is for a short period of time
- revised frequently
- market is slow changing
- those preparing forecast have good understanding of how to use data and what market is like

Question 5

casual modelling

Answer 5

tries to find a link between data sets

Question 6

correlation coefficient

Answer 6

sum of xy / (sum of x^2) (sum of x^2)

+1 means there is a positive correlation, -1 means negative correlation and 0 means none

Question 7

qualitative forecasting

Answer 7

relies on expert opinions