Sales Forecasting Flashcards
What is sales forecasting
The process of trying to estimate or predict future sales depending on consumer behaviour.
What’s extrapolation
Using past business data to forecast future sales.
Factors that should be considered when carrying out sales forecasting…
Economic factors
Consumer factors
Competition factors
What is the Time-series analysis
Uses evidence from past sales records to predict future sales patterns.
Methods of time series analysis
Seasonal analysis
Trend analysis
Cycle analysis
Random factor analysis
Seasonal Analysis
Sales measured to examine the seasonality of demand. E.g ice-cream sales will be higher in summer
Trend Analysis
Focuses on long term data over many years to determine general tendency of sales.
Cycle analysis
Examines relationship between demand levels and economic activities
Random factor analysis
Explains how unusual or extreme sales figures occur
Correlation
Measures the relationship between two variables, either positive or negative
What is ‘Moving Averages’
Technique for identifying the underlying trend, removing fluctuations in data
To calculate:
Add up 3 figures staring with the one before and divide by 3
What’s brainstorming
Technique used to promote creative thinking and generate new ideas
Brainstorming : Problem Statement
This is the focus of the discussion. E.g ‘How can we improve the product to increase sales?’
Intuition
Used when limited data is available to collect so managers may use their ‘gut feeling’
The Delphi technique
When a panel of experts respond to open ended questions and to each other until reaching an agreement.
