Sales forecasting

Question 1

what is sales forecasting

Answer 1

sales forecasting is the art or science of prediction future demand by anticipating what consumers are likely to do. allows a business to predicted sales.

Question 2

factors that affect sales forecasting

Answer 2

• Consumer trends- tastes and fashion may affect the market
• Economic variables- demand for exports could be sensitive to changes on the exchange rate, while sales at home will probably be affected if the economy slips into recession.
• Actions of competitors- a better competitors product may reduce the sales of the business compared to the sales forecast, hard to predict

Question 3

sales forecasting advantages

Answer 3

• data from several years can give a business an accurate guide for future performance.
• quantitative statistical techniques can make the data useful
• qualitative techniques take into account known future conditions

Question 4

Difficulties with sales forecasting

Answer 4

• sales forecasting is based on pasted dated this may not reflect what will happen in future
• a new business will have no historical date to use to forecast sales
• if the market is subject to significant technological change, todays rational prediction may look foolish in a year or two
• new competition may enter the market after the forecasting was made,overturening the underling logic of the prediction.

Question 5

The difference between quantitative and qualitative data

Answer 5

Quantitative data refers to any information that can be quantified, counted or measured, and given a numerical value.
Qualitative data is descriptive in nature, expressed in terms of language rather than numerical values. like opinions