4.3 Sales Forecasting (HL)
A quantitative management technique used to predict a firm’s level of sales over a given period.
Extrapolation- identifies the trend by using past data and extending this trend to predict future sales.
Benefits | Limitations |
Improved working capital and cash flow | Limited information |
Improved stock control | Inaccuracy of predictions |
Improved productive efficiency | Garbage in garbage out (GIGO) |
Help to secure external sources of finance | External influences |
Improved budgeting |