Question

List and explain Five or more factors of Sales Forecasting for a company. Explain how each of the Five or more factors influence the outcome of a sales forecast.

Answer 1

Please find below answer:

Factor influencing outcome of sales forecasting are as per below :

1.General economic condition: It will focus on general economic condition relating to firm and the consumers. The forecaster must see the general economic trend inflation or deflation, which effect the business favorably or adversely. A view at economic, political and the general trend in of the business facilitate to build a forecast more accurately. This will help in setting realistic goals and outcomes of sales target.

2.Consumer: Products like, wearing apparel luxurious goods, furniture, vehicles, the size of population by its composition-customers by age,sex,type ,economic condition etc has an important role. And trend of fashions, religious habits, social group influencers etc. This will be directly liked to your forecast of sales and outcomes as this will determined the sales target achieved.

3.Changes within the firm: future sales are greatly affected by the changes in pricing, advertising policy, quality of products etc. A careful study in relation to the changes on sales volume may be studied carefully. Sales can be increased by price cut, enhancing advertising polices, increased sales promotion, concession to customers.

4. Period: The required information must be collected on the basis of period, short run, medium run and long run forecasts.

Importance of sales forecasting

1.Supply and demand of the product can be easily manage based on above factors and helps firm in achieving target production.

2.Allocation and reallocation of sales territories are facilitated.

3. A good inventory control is advantageously benefited by avoiding the weakness of under stocking and overstocking.