Sales Forecasting Flashcards
What is a Sales Forecast?
A prediction of achievable sales revenue, based on historical sales data, analysis of market surveys and trends and salespersons’ estimates.
What is the purpose of Sales Forecasting?
Act as a goal against which a firm can measure progress.
A business can categorise Sales Forecasting methods either using qualitative or quantitative methods. What are the Qualitative and Quantitative Methods?
Quantiative
Time Series Analysis
Use of Market Research Data
Qualitative
Delphi Technique
Brainstorming
Intuition
Expert Opinion
Define Times series analysis
Time series analysis uses evidence from past sales records to predict future sales patterns.
List the 4 methods of time-series analysis
Seasonal analysis
Trend analysis
Cycle analysis
Random factor analysis
Define extrapolation
Extrapolation involves taking the past and extending it into the future.
What are the 3 types of correlation a business might see
Positive correlation
Negative correlation
No correlation
Why might a business use Correlation to predict sales figures?
A correlation measures the relationship between two variables.
The ways in which a business can use market research data to predict sales are as follows:
→ Surveys of consumers’ intentions
→ Direct sales information
→ Test marketing
When would qualitative sales forecasting methods be used?
Qualitative forecasting methods are used when historical data is not available to carry out quantitative methods. Qualitative methods involve the use of opinions to predict future events and are subjective.
What ways can a business obtain qualitative sales forecasting methods?
Delphi technique
Brainstorming
Intuition
Expert opinions
What is the Delphi Technique?
The Delphi technique is based on researching the views of a panel of experts.
Initial questionnaire to identify a problem.
Questionnaire completed independently.
Responses summarised.
Further questionnaire created based on the findings.
What is Brainstorming?
Brainstorming is a subjective technique for generating new, useful ideas and promoting creative thinking, usually between a group of people.
What is intuition?
Business leaders and managers may instead use their ‘gut feeling’ or intuition.
What is expert opinion?
When a business tries to use consultants who specialise in the industry to forecast the future.
