2.2.1 - Sales Forecasting

Question 1

What is a sales forecast?

Answer 1

Predicts future sales to inform key decisions

Question 2

What are the 3 key factors affecting sales forecasts?

Answer 2

• Consumer Trends
• Competitors
• Economic variables

Question 3

Explain types of consumer trends and their effects

Answer 3

1. Seasonal Varieties
   - Christmas/Major events impact demand for certain products
2. Long term trends
   - Behaviour and attitudes change and increase/decrease in popularity
3. Celebrities
   - Short term impact when popular

Question 4

Effect of inflation,unemployment, interest and increase in GDP on whether foretasted sales increase/decrease

Answer 4

Inflation = decrease
Unemployment = decrease
Interest = decrease
Increase GDP = increase

Question 5

What 4 key decisions does sales forecasting help?

Answer 5

• Staffing
• Cash flow
• Promotions
• Purchasing raw materials

Question 6

Explain how actions of competitors affects sales forecasting

Answer 6

• One business failing could increase sales of another
• Marketing campaign could take popularity
• Rival products decrease sales

Question 7

Advantages of sales forecasting

Answer 7

• Help make key decisions
• Help to purchase raw materials and promotion/staffing

Question 8

Disadvantages of sales forecasting

Answer 8

• Data may be inaccurate
• Unpredictable economic variables
• Consumer trends constantly change
• Up to interpretation