sales forecasting

Question 1

what is sales forecasting

Answer 1

The prediction of future sales based upon value and future trends

Question 2

what is sales forecasting used for?

Answer 2

• Inform resource management about inventory levels and production output
• Inform cash flows and budgets
• Aid workforce planning

Question 3

What are the benefits of sales forecasting?

Answer 3

• helps workforce planning
• helps target setting for employees
• accurate budget setting
• manage stock levels

Question 4

What are the disadvantages of sales forecasting?

Answer 4

• The reliability of the data is dependent upon the expertise of forecasters
• The research methods or sampling used may be biased and inaccurate
• Forecasts that look too far into the future don’t account for unforeseeable events

Question 5

What is time series analysis?

Answer 5

A quantitative sales forecasting method that uses past data or statistics to predict future trends

Question 6

What are the advantages of time series analysis?

Answer 6

• Accounts for anomalies in past data
• Allows businesses to monitor their activity and make plans according to data
• Based on actual trends and statistics so SHOULD be accurate

Question 7

What are the disadvantages of time series analysis?

Answer 7

• Assumes that trends will continue
• Less useful for long-term forecasts
• Doesn’t account for future knowledge and trends