Sales Forecasting
Sales forecasting is a quantitative management technique used to predict a firm’s
level of sales over a given time period . It is important because sales forecasts can
help a firm to identify problems and opportunities in advance . However, trying to
predict what will happen in the future is difficult because there are so many variables
that are subject to change . Hence , the forecasts may turn out to be completely
inaccurate.1
Sales
(in lakhs )
4 point moving
average
Central Trend
Variation
( $)
12.5
12.9
13.17
13.7
13.46
0.24
13.86
-0.26
13.82
0.98
13.38
0.42
12.41
0.09
11.11
0.2
10.11
-0.81
13.75
13.6
13.97
14.8
13.67
13.8
13.1
12.5
11.72
11.3
10.5
9.3
9.72
October
8.9
9.57
-0.67
9.42
November
9.4
December
10.1
The above sales forecast shows random variations which clearly means that the
sales revenues are caused by erratic and the betrayal nature of its sellers. And by
this the company will get a clear idea of what changes to make to be profitable in the
long term. After taking into account everything the company’s existing stock control
will be improved as the accurate sales forecasts help to ensure that the correct
levels of stocks are available for use in production. Also the company will see an
improved productive efficiency and will have a better control on its team by giving
them an informed idea of what to do in the near future, by optimising their marketing
plans and it will enable it to Operate more efficiently and profitably.