Sales Forecasting

• Help a business make predictions based on their income

  • Forecast likely profit

  • Construct cash flow forecasts

  • Organise staffing levels and create HR plans

  • Plan the required level of production to meet demand

Factors affecting sales forecasts:

• Consumer trends

• Economic variables - interest rates, inflation, unemployment

• Actions of competitors

Difficulties of sales forecasting:

• Extrapolation - involves using past trends and data to predict what is going to happen in the future (just because something has happened doesn’t mean its going to happen in the future