Sales Forecasting Flashcards
1
Q
What is forecasting?
A
The art and science of estimating future sales or costs with accuracy
2
Q
What is a contingency plan?
A
Plans held in reserve in case things go wrong
3
Q
What are real incomes?
A
Changes in household incomes after allowing for changes in prices
4
Q
What is a sales forecast?
A
A method of predicting future sales using statistical methods
5
Q
Why do firms need sales forecast?
A
Because they are the starting point for all planning e.g financial, HR or marketing plans
6
Q
Purpose of sales forecast
A
- Used in cash flow forecasting in order to estimate in flows each month
- Used in HR planning to estimate how many staff to employ
- Used in production planning to estimate how much raw material to buy
- Usedz in HR and finance to estimate what targets to
give to the sales team and what commission to pay - Forms the basis of the businesses overall aims and objectives which are viewed by investors to judge the success of the company
7
Q
What is extrapolation?
A
Using past sales data to predict future sales data
