sales forecasting Flashcards
what is sales forecasting?
an estimate of how much your business will sell in a specific time period
why is sales forecasting useful?
it allows a business to plan ahead and set objectives, which can motivate staff and increase the likelihood of profitability.
what can affect salesforecasting?
- trends
- state of the market
- management
- government legislation
how to calculate a three-point moving average?
take a number in the series in the previous and next numbers and averaging the three
what is extrapolation?
extracting data from a certain point in a graph and using it to predict trends (market can change).
what is a time-series analysis?
an analysis of a sequence of data points collected over a consistent period of time.
how can a time-series analysis be useful?
-can allow a business to plan ahead
-motivates employees
-gives a competitive edge
HOWEVER:
-market is dynamic
-could cause inflexibility in decision making
what is intuition in terms of qualitative forecasting?
a business using their own personal judgements to make a decision
what is brainstorming in terms of qualitative forecasting?
mulling over ideas in an attempt to devise/find a solution to a problem.
what is the Delphi method in terms of qualitative forecasting?
coming to a decision by surveying a panel of experts.
what are the advantages of qualitative forecasting?
- allows a business to plan ahead
- can motivate employees by delegating work
- quick and easy
what are the disadvantages of qualitative forecasting?
- inflexibility may lead to unmotivated staff
- market could change
