Sale Forecasting In Organization1
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Transcript of Sale Forecasting In Organization1
After market segmentation process and target market selection, appropriate sale forecasting leads to strategic an systematic
programming.
What is the sale forecasting?
• Is the process of a company predicting what its future sales will be.
• The program that your sales force provides is the source ofinformation that allows you to manage virtually all aspects of yourbusiness.
Forecasting is one of the IMPORTANT aspects of administration.
Why do we need to forecast sales?
Good Forecasting
Increase Knowledge
Improve
Manage products
informed decisions
Develop
Top ten reason:
Marketing
Price Stability
Continuous Improvement
Internal Controls
Financial Planning
Supply Chain Management
Inventory Controls
Higher OTIF Delivery
Demand Forecasting
Sales Planning
:Sales Planning
• Planning future activities,
• Providing each of them with a business plan,
• Identify the customers to meet their objectives.
Demand Forecasting:
• Best positioned to gather information about anticipated demand.
• Good estimate of the demand for the products you sell.
Higher OTIF Delivery:
• Achieve a higher rate of On Time In Full (or OTIF, delivery)
• Guarantees that sufficient product will be manufactured.
Inventory Controls:• Better prepared your company will be to manage its
inventory.
• Avoiding both overstock and stock-out situations.
Supply Chain Management:
• Predict demand and manage production more efficiently.
• Better control over your supply chain.(This affords you the opportunities to manage resources and take full advantage of just-it-time ordering)
Financial Planning:• Gives you the information you need to predict
revenue and profit.
• Also ability to explore possibilities to increase both revenue and net income.
Internal Controls:
• Better control of your internal operations.
• You can make decisions about hiring marketing and expansion.
Continuous Improvement:
Continuous Improvement
Revising the Process
Improve the Accuracy
Can Improve ALLAspects
Price Stability:
• The good levels of inventories that you maintain will prevent the need for panic sales to rid your business of excess merchandise.
Marketing:• Gives marketing an advanced look at future sales and
offers the opportunity to schedule promotions if it appears sales will be weak.
Types of Forecast by Time Horizon
• Up to 1 year, usually less than 3 months
• Job scheduling, worker assignments.
Short-range forecast
• 3 months to 3 years
• Sales and production planning, budgeting
Medium-range forecast
• 3+ years
• New product planning, facility location
Long-range forecast
Seven Steps In Forecasting
Determine the use of
the forecast
Select the items to
be forecast
Determine the time
horizon of the
forecast
Select the forecasting
model(s)
Gather the data
Make the forecast
Validate and
implement results
Importance of Sales Forecasting:
Sales forecasting
Production
Purchasing
Human Resources
Finance
Research and Development
Marketing
1-Estimate market size:
Estimate market size
Defining the Market
Determining Approach
Selecting Sources
Data Structuring—Typology
Data Analysis
2-Identify market needs:
Identify market needs
First sample
Q=n*q*p
Second sample
chain ratio method
First sample:
The number of customer for specific products
The number of product purchased by a customer
averagely
Average price
Second sample:
• A method of calculating total market demand for a product in which a base number.
• The total population of a country, is multiplied by several percentages, such as the number in the population above and below certain ages…
Example:
:Forecasting Errors
• Possible reasons for errors in forecasting1. Flaws in data used in forecasting process,
2. Insufficient data,
3. Unpredictable economic and socio-political environment,
4. Non-realistic and accurate assumptions,
5. Technical and technological changes,
6. Shifts in economic structure,
7. Administrative errors.