Sales forecasting

Question 1

What is sales forecasting ?

Answer 1

Sales forecast is the art or science of predicting future demand by anticipating what consumers are most likely to do with given set of circumstances

Question 2

What do sales forecast techniques allow a business to do ?

Answer 2

Sales forecast techniques allows business to predict sales.

Once a business believes it has an accurate estimate of future sales it can predict its Finances

Sales forecast allow for a business to
-Estimate the quantity and the cost of purchase for raw materials
-production levels

Question 3

When would you use quantitative forecasting methods

Answer 3

When there is historical data available

Question 4

What is Time series analysis ?

Answer 4

Time series analysis is the use of evidence to predict future sales patterns.

Question 5

When are Qualitative forecasting used ?

Answer 5

Qualitative forecasting methods are used when there is no historic data available.

Question 6

What are the different types of qualitative forecasting methods?

Answer 6

• Brainstorming
• Intuition
• Expert Opinion

Question 7

Brainstorming

Answer 7

Brainstorming is a subjective technique for generating new, useful ideas and promoting creative thinking.

It is usually done between a group of people and most effective in a group of 6-12 people.

Brain storming usually happens begins with a problem statement such as ‘ How will the market be different in 5 years?’

People from all different backgrounds should be in the brainstorming session to so new fresh ideas can be generated.

Question 8

Intuition

Answer 8

Intuition is when businesses use gut feelings.

It is cheap and fast as there is no need to gather data or market test.

It involves the use of intuition, insight and luck.

Question 9

Expert Opinion

Answer 9

Expert opinion is the use of a consultant.

Experts are useful for gaining specialised insights into likely future patterns and trends however a business should not use this on a standalone basis