Quantitative sales forecasting
- Created by: noe
- Created on: 18-09-20 09:52
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- Quantitative sales forecasting
- Likely to be more reliable when...
- Forecast is for a short period of time in the future
- Revised frequently to take into account new data
- Market is slow-changing
- Market research data is available
- Those preparing the forecast have a good understandingof how to use the data
- Those preparing forecast have a good 'feel' for the market
- Producing a forecast range can increase accuracy
- Optimistic forecast
- Low probability of occurring but gives an idea of best- and worst-case scenarios
- Pessimistic forecast
- Low probability of occurring but gives an idea of best- and worst-case scenarios
- Central forecast (highest probability of occurring)
- Supplying these forecasts to other departments gives them an idea of the possible variations they might have to face
- Optimistic forecast
- Causal modelling: use to find a link between one set of data and another
- E.g. the amount spent on advertising and sales level
- Data plotted onto a scattergraph and line of best fit drawn through the data to show a either a positive or negative relationship
- Correlation (relationship between two variables)
- Likely to be more reliable when...
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