reveal underlying patterns by recording and plotting data overtime.
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What is a trend?
Long term movement of a variable.
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Seasonal fluctuations
repeat on a regular basis
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random fluctuations
no pattern to them.
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what is extrapolation?
Used to predict future sales
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When is extrapolation mainly useful?
In a fairly stable environment- e.g. when size of market or number of competitors is unlikely to change
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disadvantages of extrapolation
relies on past trends remaining correct, sudden, unexpected events can be a pitfall
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what is correlation?
a measure of how closely two variables are related.
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what does a strong positive correlation look like?
this:
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what does a weak positive correlation look like?
this:
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what does a strong negative correlation look like?
this:
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what does no correlation look like?
this?
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how can sales forecasts help the finance department?
can help them produce cash flow forecasts.
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How can sales forecasts help production and HR?
can help them prepare for the expected level of sales. Make sure they have correct amount of machinery, staff and stock.
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what is a confidence interval?
a range of values that, you are fairly sure, the value for the population lies within
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what does a confidence indicate?
how sure you are that the value for the population lies.
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why do many companies now use technology?
to gather information about the lifestyles of their customers and the products they buy.
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Why are loyalty cards beneficial to businesses?
can help businesses identify customer spending- preferences. Can then market towards that
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examples of ways businesses can use technology to benefit the business?
Social Media, Search Engines, Wi-Fi
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What are advantages to companies using software?
process more data, identify impact of potential changes, analyse data and draw useful correlations.
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What are disadvantages to companies using software?
can be expensive, staff need to be trained, might value quantity of information available over quality, might find computer systems aren't up to the job of handling software.
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