Mastering Quantitative Sales Forecasting

Quantitative Sales Forecasting using Time Series Analysis

• Sales forecasting is a method of predicting future sales using statistical methods.
• The purpose of sales forecasting is to ensure good cash flow and make operational decisions.
• Time series analysis is used to predict future sales by analyzing past sales figures.
• The first step in time series analysis is to collect raw sales data over time.
• The three-point moving average is used to smooth out variations in the sales data.
• The three-point moving average is calculated by taking the average of three consecutive data points.
• The moving averages are plotted on a graph and a line of best fit is drawn to illustrate the trend.
• Extrapolation is used to forecast future sales by extending the line of best fit.
• The forecasted sales for 2017 can be read off the extrapolated line.
• The final step is to adjust the forecast for any variations between the actual data and the moving average.
• Adjusting for variation helps to make the forecast more accurate.
• Sales forecasting is an important tool for businesses to make informed decisions about their operations and marketing strategies.