sales forecasting

Question 1

what is the purpose of sales forecasting

Answer 1

managers need to know what is likely to happen in their industry
may need more staff
profit and cash flow forecasts will depend on sales forecasts

Question 2

what are the factors affecting sales forecasting

Answer 2

consumer trends
economic variables
actions of competitors
seasonal fluctuation

Question 3

how does consumer trends affect sales forecasting

Answer 3

if consumer tastes and preferences change the sales forecast will change
demographics change eg an ageing population
globalisation of a brand
affluence

Question 4

how does economic variables affect sales forecasting

Answer 4

some products are highly sensitive to a change in the economy because their income elasticity is high
a fall in the pound will make imports more expensive
a rise in taxation
inflation

Question 5

what are the difficulties with sales forecasting

Answer 5

if the business is new
market is subject to significant disruption from technological change
demand is sensitive to change in income
based on continuation of past trends -only correct if future is like the past.

Question 6

how do you calculate sales forecast

Answer 6

new value / original X 100