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Sales Forecasting Techniques Explained

This document provides an overview of sales forecasting. It defines sales forecasting as estimates of future sales. It notes that sales forecasting is difficult as forecasts are often wrong. Key decisions like employment levels, promotions, and production capacity are derived from sales forecasts. Forecasting can be qualitative using methods like user expectations or quantitative using methods like time series analysis. The selection of a forecasting method considers accuracy needs, available data, time horizon, and product life cycle stage. Sales forecasts link to budgets for sales, production, costs, profits, and balance sheets. The common forecasting process has three stages: a macroeconomic forecast, industry forecast, and company forecast.

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Siva Bhandaru
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142 views11 pages

Sales Forecasting Techniques Explained

This document provides an overview of sales forecasting. It defines sales forecasting as estimates of future sales. It notes that sales forecasting is difficult as forecasts are often wrong. Key decisions like employment levels, promotions, and production capacity are derived from sales forecasts. Forecasting can be qualitative using methods like user expectations or quantitative using methods like time series analysis. The selection of a forecasting method considers accuracy needs, available data, time horizon, and product life cycle stage. Sales forecasts link to budgets for sales, production, costs, profits, and balance sheets. The common forecasting process has three stages: a macroeconomic forecast, industry forecast, and company forecast.

Uploaded by

Siva Bhandaru
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Sales Forecasting

Rupam Deb ( 20076 )

Definition :
Sales Forecast refers to the estimates of future sales of a companys products in the market.

Facts :
Sales forecasting is a difficult area of management forecasts made usually turn out to be wrong sales forecasting is a science & an art Sales forecasting is very popular in industrially advanced countries where demand conditions are more uncertain than the supply conditions.

Key decisions that are derived from sales forecast include:


-Employment levels required -Promotional mix -Investment in production capacity

Types of forecasting :
Macro forecasting is concerned forecasting markets in total. with

Micro forecasting is concerned with detailed unit sales forecasts.

Forecasting can be classified into qualitative forecasting and quantitative forecasting . The methods used in qualitative forecasting are :
user expectations sales force composite jury of executive opinion Delphi technique and market test

Methods used forecasting are:

in

quantitative

time series analysis moving averages exponential smoothing regression and correlation analysis, and multiple regression models

Selection Of Forecasting :
The degree of accuracy required The availability of data and information Time horizon that the sales forecast would cover. The position of the products in its life cycle

Relationship of Forecasting to Budgets :


Sales Forecast
Sales Budget

Production Budget
Direct Labor Budget

COGS Budget
Budgeted P/L Statement

Budgeted Balance Sheet

A common method of preparing a sales forecast has three stages :


Prepare a macroeconomic forecast
Prepare an industry sales forecast Prepare a company sales forecast

Forecasting Process
Forecast Objective Determined independent and dependent variables Develop Forecast Procedure

Select forecast Analysis method Evaluate Result versus forecast

Total forecast Procedure

Make & finalize forecast

Present assumption about data

Gather & analyze data

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