Sales Forecasting (1&2)
Sales Forecasting is the process of estimating what your business´s sales will be in the future. It collects data from general economy, industrial sector and the company and uses them for doing plans, budgets and defining targets. It is usually thought that Forecast are only for sales function, however it is not true. They usually include also useful information for production, distribution, personnel, finance or R&D divisions.
It has been said that Sales Forecasting is affected by general economy, industrial sector and the company approach. However in a closer way there are several factors which influence it like advertising expenditure, news, social changes, consumer trend, pressure groups, product performance, pricing, distribution availability, competitive activity, product lifecycle, company resources limitation, seasonal factors, weather or promotion activities. With all these components it has been tried to generate a mathematical formula for getting a perfect forecasting. However that magic formula does not actually exists due to the process complexity.
Nevertheless this Sales Forecasting is very important for several company goals like doing the best inventory management, having the best portfolio alignment, eliminating product obsolescence, learning more about customer’s needs, anticipating future capital needs, planning marketing mix, improving distribution, identifying trends and worker´s opportunities.
The Sales Forecasting studies can be classified depending on how far it is, if it is macro or micro and depending on the kind of forecasting method.
On the first way it can be short term forecasts, from three to six months, medium term forecasts, for around 18 months and the long term forecasts, typically an attempt to forecast three to five years ahead with limited accuracy.
On the other hand it can be macro forecasting if it studies the overall market or different...