sales management sales forecasting topic 13. sales forecasting what is it? why do it? qualitative vs...
TRANSCRIPT
Sales Forecasting
• What is it?• Why do it?• Qualitative vs Quantitative• Goal = Accuracy• Commonly Done by Marketing
Forecasting Overview
• Hard to do, but must be done• Shorter Time Frames are more accurate• Harder for New Products • No Substitute for Actual Demand• Done for Each Product, Territory, …..• Multiple Methods often used
Mean Absolute % Error (MAPE)
• Why Mape (or MSE)?• All past forecasts• Does not control for external shocks
Qualitative Methods
• Turning Points & Shocks• Sales Force Composite• Jury of Executive Opinion• Survey of Customer Buying Intentions
Quantitative Methods
• Strong & Weak Points• Seasonal Adjustments• Naïve• Moving Averages• Exponential Smoothing• Other Methods
Exponential Smoothing Example
• Alpha = 0.9• 2020 = 1000• 2021 = 1200• 2022 = 1100• 2022 forecast = .9 (1200) + .1 (1000) = 1180• 2023 forecast = .9 (1100) + .1 (1180) = 1108
Regression
• Dependent vs Independent Variables• Can you get data?• Better than using dependent variable alone?