4.3 - Sales Forecasting Overview

These flashcards cover key concepts and terms related to sales forecasting based on the provided lecture notes.

What is sales forecasting?

Sales forecasting is a quantitative management technique used to predict a firm’s level of sales over a given period of time.

What is the purpose of sales forecasting for a firm?

It helps firms identify problems and opportunities in advance.

What forecasting method uses past data to predict future sales?

Extrapolation is a forecasting method that identifies trends using past data.

Why is market research important in sales forecasting?

Identifying and forecasting the buying habits of consumers is vital to a firm’s prosperity and survival.

What are the three main elements of time series analysis?

The document does not provide explicit details, but time series analysis focuses on trends from actual sales figures.

What type of sales variation is associated with product recalls?

Product recalls are considered random sales variations.

What are some benefits of sales forecasting?

Benefits include improved working capital and cash flow, improved stock control, improved productive efficiency, helps secure external sources of finance, and improved budgeting.

What are limitations of sales forecasting?

Limitations include limited information, inaccuracy of predictions, garbage in garbage out, and external influences.

How can descriptive statistics help in sales forecasting?

Descriptive statistics can improve the accuracy of sales forecasting by analyzing trends and patterns in sales data.