Sales Forecasts

Question 1

What’s a sales forecast?

Answer 1

An estimate to the amount of products sold in a future period

Question 2

Benefit of Sales Forecasts? (5)

Answer 2

1. Able to predict amounts of sales volume
2. Allows business to not over or understock
3. To not produce waste and reduce outflows
4. Leading to a positive net cash flow
5. Able to pay suppliers

Question 3

Drawback of Sales Forecasts?

Answer 3

1. Requires Market Research to increase demand
2. Reliable from a large sample size and need specialist researchers
3. Leading to increase outflows and a negative net cash flow
4. Straining cash reserves having to sell non current assets to pay suppliers