Topic 30: Sales Forecasting

Question 1

Why business forecast sales

Answer 1

. Planning
. Budgeting
. Cash flow management
. Investment decisions
. Marketing decisions

Question 2

Purpose and importance of forecast sales

Answer 2

1. Resource allocation
2. Financial implications
3. Planning for growth
4. Risk management

Question 3

Methods of sales forecasting

Answer 3

. Time series analysis
. Market research
. Expert opinion

Question 4

Factors affecting sales forecast

Answer 4

1. Consumer trends
2. Economic variables
3. Actions of competitors

Question 5

Benefits of sales forecasting

Answer 5

. Improved decision- making
. Efficiency
. Financial planning
. Coordination

Question 6

Difficulties and limitations of sales forecasting

Answer 6

1. Data reliability
2. Volatile consumer tastes
3. Uncertain external environment
4. Subjectivity
5. Time lag
6. Over reliance on past trends