Sales forecasting

Question 1

Sales forecasting A01

Answer 1

The process of predicting future sales levels by volume or value

Question 2

Benefits of sales forecasting

Answer 2

• aids workforce planning
• informs resource management about logistics

Question 3

Drawbacks of sales forecasting

Answer 3

• Dynamic nature of the markets
• Relies on expertise of forecasters
• Depends on how far into the future the forecasts are looking

Question 4

Time series analysis definiton

Answer 4

A quantitative method of forecasting that uses past data to predict future sales and takes an average to smooth any anomalies.

Question 5

Moving averages calculation

Answer 5

(Month+month before+month after) divided by 3

Question 6

Benefits of time series analysis

Answer 6

-Smooths out anomalies in past data
-Based on actual trends so should be more accurate

Question 7

Disadvantages of time series analysis

Answer 7

-Assumes that last trends will continue
-Less useful for long term forecasts

Question 8

Limitations of quantitative techniques

Answer 8

• the further into the future, the more uncertainty
• the past isn’t always a fair indicator of future trends

Question 9

Delphi technique ao1

Answer 9

A qualitative method of forecasting that research’s the views of a panel of experts. A questionnaire is sent to the experts individually and results are summarised. This is repeated until a concensus forecast is reached.

Question 10

Advantages of delphi

Answer 10

• opinions aren’t influenced by others
• flexible to a variety of situations and problems

Question 11

Disadvantages of delphi

Answer 11

• very time consuming
• monetary payments to experts

Question 12

Advantages of qualitative forecasting

Answer 12

• shares opinions
• seeks views of experts

Question 13

Disadvantages of qualitative

Answer 13

• not backed by data
• can be difficult to analyse
• ignores external trends