Quantitative Sales Forecasting

When are quantitative sales forecasting techniques used?

Quantitative forecasting methods are used when there is historical data available.

Quantitative methods rely heavily on data and are objective.

State some quantitative sales forecasting techniques.

• Time series analysis (moving averages)

• Correlation

• Extrapolation

What is a moving average?

Moving averages smooth out fluctuations in data which could potentially skew predictions.

What is correlation?

A correlation measures the relationship between two variables, e.g. whether there is a link between a business’s advertising expenditure and the amount of sales it achieves.

The data of the two variables are plotted on a scatter graph.

What is extrapolation?

Involves using past trends and data to predict future sales.