Sales forecasting

Question 1

Time series analysis

Answer 1

A variety of techniques to predict the future trends using past data.

Question 2

The four components that a business wants to identify:

Answer 2

-the trend
-seasonal fluctuations
-cyclical fluctuations
-random fluctuations

Question 3

Benefits of sales forecasting:

Answer 3

-inform cash flow forecasts so there’s a clear idea of what cash inflows
-allows business to plan orders of supplies
-enable them to ensure they have the correct staffing levels
-ensure it has the capacity to meet projected orders.

Question 4

Factors affecting sales forecasting:

Answer 4

1. Consumer trends
2. Economic variables
3. Actions of competitors

Question 5

Consumer trends

Answer 5

Habits and behaviours of consumers, most of which are short term. Mostly a response to fashion and seasonal variations.

Question 6

Economic variables

Answer 6

-Economic growth
-Interest rates
-Inflation
-Unemployment
-Exchange rates

Question 7

Actions of competitors

Answer 7

Their 4p’s and if the impact is short term or long.

Question 8

Difficulties of sales forecasting:

Answer 8

• volatile consumer taste snd preferences.
• opinions and judgements are subjective