WorksheetsSales forecasting
Total questions: 36
Worksheet time: 18mins
Using past experience or past business data to forecast future sales is called
Extrapolation
Invention
Depreciation
Correlation
Sales forecasting methods can be categorised into quantitative and qualitative techniques. Which of these is quantitative?
Time series analysis
Delphi technique
Brainstorming
Intuition
Sales forecasting methods can be categorised into quantitative and qualitative techniques. Which of these is qualitative?
Time series analysis
Delphi technique
Use of market research data
Offshoring
Calculate the moving average of these three months:
January 230
February 260
March 350
320
280
960
840
Calculate the moving average of these three months:
January 120
February 128
March 142
3900
390
130
135
Calculate the moving average of these three months:
January 152
February 131
March 179
152
156
138
154
Correlation measures the relationship between two variables.
The relationship between supply and price is usually..
Positive
Negative
No relationship
Correlation measures the relationship between two variables.
The relationship between demand and price is usually..
Positive
Negative
No relationship
In order to extrapolate the data, _________ is drawn
line of estimation
line of best fit
line of time-series
Time series analysis is useful because...
It helps the business to plan
It is always 100% accurate
It is less useful in the long term
Success is not guaranteed
It is always a good indicator of the future
Time series analysis is useful because...
It reduces the risk of unexpected surprises that could affect business performance
It is always 100% accurate
It is less useful in the long term
Success is not guaranteed
It is always a good indicator of the future
Time series analysis is useful because...
Human resources planning is needed
It is always 100% accurate
It is less useful in the long term
Success is not guaranteed
Historical data is not always a good indication of what might happen in the future
However, time series analysis has some problems because...
Human resources planning is needed
It is always 100% accurate
It helps financial planning including cash flow
Success is not guaranteed
It helps production planning
However, time series analysis has some problems because...
Human resources planning is needed
It is always 100% accurate
It helps financial planning including cash flow
It is less useful in the long term
It helps production planning
Market research data includes:
Surveys of consumers' intentions, direct sales information, test marketing
Surveys of consumers' intentions, depreciation information, test marketing
Surveys of consumers' intentions, spaniel information, social marketing
Surveys of players' intentions, exchange rate information, inflation marketing
Surveys of consumers' intentions include:
...asking people directly what they intend to do in the future. Market research companies eg MINTEL may ask "Do you plan on going on holiday to Florida in the next 3 years?"
...sales teams interacting closely with customers. Staff might notice trends and spot market changes, shifts in tastes, preferences and attitudes. Managers may collect this information and predict future sales
.. testing consumers' response to a product before the full release of the product. The product may be released in a small geographical area, or to a small section of the target market eg films are test marketed before being put on general release.
..... extrapolation of ONS data to estimate likely sales of a good or service. This is particularly useful in the third sector, although charities dislike having to pay for this information
Direct sales information include:
...asking people directly what they intend to do in the future. Market research companies eg MINTEL may ask "Do you plan on going on holiday to Florida in the next 3 years?"
...sales teams interacting closely with customers. Staff might notice trends and spot market changes, shifts in tastes, preferences and attitudes. Managers may collect this information and predict future sales
.. testing consumers' response to a product before the full release of the product. The product may be released in a small geographical area, or to a small section of the target market eg films are test marketed before being put on general release.
..... extrapolation of ONS data to estimate likely sales of a good or service. This is particularly useful in the third sector, although charities dislike having to pay for this information
Test marketing include:
...asking people directly what they intend to do in the future. Market research companies eg MINTEL may ask "Do you plan on going on holiday to Florida in the next 3 years?"
...sales teams interacting closely with customers. Staff might notice trends and spot market changes, shifts in tastes, preferences and attitudes. Managers may collect this information and predict future sales
.. testing consumers' response to a product before the full release of the product. The product may be released in a small geographical area, or to a small section of the target market eg films are test marketed before being put on general release.
..... extrapolation of ONS data to estimate likely sales of a good or service. This is particularly useful in the third sector, although charities dislike having to pay for this information
Qualitative methods of sales forecasting include:
The Delphi method, Brainstorming (thought showers), Intuition, Expert opinion
The Delphi method, Brainstorming (thought showers), Estimation, Expert assumption
The Daphne method, Brainstorming (thought showers), Intuition, Expert guarantees
The Diana method, Brainstorming (thought showers), Intuition, Expert opinion
The Delphi Method.....
Based on researching the views of a panel of experts. The panel of experts complete a questionnaire. THe responses are analysed and a second questionnaire is developed from their answers to the first questionnaire.
A subjective technique for generating new , useful ideas and promoting creative thinking. "The Problem Statement" is the basis for discussion. Eg "How can we improve this product to increase sales?" . Usually 6 to 12 participants. There are no wrong answers.
Sometimes there is little historical data available - or the market is extremely volatile and unstable. Business Managers may use their "gut feeling" or intuition. Steve Jobs considered intuition to be "more powerful than intellect"
A variety of information available on business issues. Some experts focus on internet marketing or the car industry or energy. Economists may focus on different industries. Weather specialists are consulted for crops. Useful for considering trends
Expert opinion.....
Based on researching the views of a panel of experts. The panel of experts complete a questionnaire. THe responses are analysed and a second questionnaire is developed from their answers to the first questionnaire.
A subjective technique for generating new , useful ideas and promoting creative thinking. "The Problem Statement" is the basis for discussion. Eg "How can we improve this product to increase sales?" . Usually 6 to 12 participants. There are no wrong answers.
Sometimes there is little historical data available - or the market is extremely volatile and unstable. Business Managers may use their "gut feeling" or intuition. Steve Jobs considered intuition to be "more powerful than intellect"
A variety of information available on business issues. Some experts focus on internet marketing or the car industry or energy. Economists may focus on different industries. Weather specialists are consulted for crops. Useful for considering trends
Brainstorming (thought showers).....
Based on researching the views of a panel of experts. The panel of experts complete a questionnaire. THe responses are analysed and a second questionnaire is developed from their answers to the first questionnaire.
A subjective technique for generating new , useful ideas and promoting creative thinking. "The Problem Statement" is the basis for discussion. Eg "How can we improve this product to increase sales?" . Usually 6 to 12 participants. There are no wrong answers.
Sometimes there is little historical data available - or the market is extremely volatile and unstable. Business Managers may use their "gut feeling" or intuition. Steve Jobs considered intuition to be "more powerful than intellect"
A variety of information available on business issues. Some experts focus on internet marketing or the car industry or energy. Economists may focus on different industries. Weather specialists are consulted for crops. Useful for considering trends
Intuition.....
Based on researching the views of a panel of experts. The panel of experts complete a questionnaire. THe responses are analysed and a second questionnaire is developed from their answers to the first questionnaire.
A subjective technique for generating new , useful ideas and promoting creative thinking. "The Problem Statement" is the basis for discussion. Eg "How can we improve this product to increase sales?" . Usually 6 to 12 participants. There are no wrong answers.
Sometimes there is little historical data available - or the market is extremely volatile and unstable. Business Managers may use their "gut feeling" or intuition. Steve Jobs considered intuition to be "more powerful than intellect"
A variety of information available on business issues. Some experts focus on internet marketing or the car industry or energy. Economists may focus on different industries. Weather specialists are consulted for crops. Useful for considering trends
Advantages of using the Delphi method
This is a structured way to enable experts to arrive at a forecast which is likely to be more accurate than forecasts of an unstructured group or an individual
Will take a substantial period of time
It assumes that experts are willing to come to a consensus and allow their opinions to be altered by the views of other experts
Monetary payments made to the experts may lead to bias in the results of the study
Disadvantages of using the Delphi method
It is flexible enough to be used in a variety of situations and applied to a range of complex problems
Participants have time to think about their answers leading to a better quality of response
It assumes that experts are willing to come to a consensus and allow their opinions to be altered by the views of other experts
A record of expert responses are created that can be used when needed
Time series analysis includes: seasonal analysis
Sales are measured on a weekly or monthly basis to examine the seasonality of sales eg ice cream sales
Focus on long term data, collected over a number of years. What is the general trend? Rising? Falling?
Long term figures are used to examine the trend of sales within the economic cycle
this attempts to analyse unusual or extreme sales figures for example. Why has this abnormal level of demand occured?
Time series analysis includes: trend analysis
Sales are measured on a weekly or monthly basis to examine the seasonality of sales eg ice cream sales
Focus on long term data, collected over a number of years. What is the general trend? Rising? Falling?
Long term figures are used to examine the trend of sales within the economic cycle
this attempts to analyse unusual or extreme sales figures for example. Why has this abnormal level of demand occured?
Time series analysis includes: cycle analysis
Sales are measured on a weekly or monthly basis to examine the seasonality of sales eg ice cream sales
Focus on long term data, collected over a number of years. What is the general trend? Rising? Falling?
Long term figures are used to examine the trend of sales within the economic cycle
this attempts to analyse unusual or extreme sales figures for example. Why has this abnormal level of demand occured?
Time series analysis includes: random factor analysis
Sales are measured on a weekly or monthly basis to examine the seasonality of sales eg ice cream sales
Focus on long term data, collected over a number of years. What is the general trend? Rising? Falling?
Long term figures are used to examine the trend of sales within the economic cycle
this attempts to analyse unusual or extreme sales figures for example. Why has this abnormal level of demand occured?
If PED is inelastic, what should businesses do to increase revenue?
Increase the price
Decrease the price
Reduce demand
Cut advertising
If PED is elastic, what should businesses do to increase revenue?
Increase the price
Decrease the price
Reduce demand
Cut advertising
If YED is +3 ELASTIC, the good is
a luxury
normal
inferior
If YED is +0.8 INELASTIC, the good is
a luxury
normal
inferior
If YED is -2.8 NEGATIVE, the good is
a luxury
normal
inferior
If YED for a product is -2.8, and the economy is in a recession, demand will
increase
stay the same
fall
If YED for a product is +4.5, and the economy is in a recession, demand will
increase
stay the same
fall
