Sales forecast

Question 1

What is a sale forecast?

Answer 1

Estimates the volume of future sales using market research or past sale data

Question 2

What is the purpose of a sale forecast?

Answer 2

• avoid cash flow problems
• use to estimate if they need to increase or decrease production

Question 3

What are the two methods of sale forecasting?

Answer 3

• extrapolation= uses trends established from historical data
• moving average= takes data series and smoothed the fluctuations to show an average

Question 4

Pros and cons to extrapolation:

Answer 4

pros- simple
not much data required
quick and cheap

cons- unreliable
assume trends will stay same in future

Question 5

What are key factors affecting sales forecasting?

Answer 5

1- consumer trends
2- economic values
3- competitor actions