Podcast
Questions and Answers
Which type of sales forecast typically covers a period of up to three months?
Which type of sales forecast typically covers a period of up to three months?
What is a primary characteristic of medium-term forecasts?
What is a primary characteristic of medium-term forecasts?
Which qualitative forecasting method involves asking customers about their likely purchases?
Which qualitative forecasting method involves asking customers about their likely purchases?
How long is a long-term sales forecast generally considered to be?
How long is a long-term sales forecast generally considered to be?
Signup and view all the answers
Which forecasting technique uses a team that does not meet in committee to make predictions?
Which forecasting technique uses a team that does not meet in committee to make predictions?
Signup and view all the answers
What is the primary focus of the jury method in forecasting?
What is the primary focus of the jury method in forecasting?
Signup and view all the answers
Which budgeting method does not consider previous budgets as a reference?
Which budgeting method does not consider previous budgets as a reference?
Signup and view all the answers
What is the primary characteristic of the Salesforce Composite forecasting approach?
What is the primary characteristic of the Salesforce Composite forecasting approach?
Signup and view all the answers
Which budgeting method involves evaluating previous budgets to forecast future budgets?
Which budgeting method involves evaluating previous budgets to forecast future budgets?
Signup and view all the answers
What does Bayesian Decision Theory mainly utilize for its forecasting approach?
What does Bayesian Decision Theory mainly utilize for its forecasting approach?
Signup and view all the answers
Which of the following is a benefit of product testing and test marketing?
Which of the following is a benefit of product testing and test marketing?
Signup and view all the answers
What is typically included in the selling expense budget?
What is typically included in the selling expense budget?
Signup and view all the answers
Which of the following budgeting methods focuses on the cost needed to achieve specific marketing objectives?
Which of the following budgeting methods focuses on the cost needed to achieve specific marketing objectives?
Signup and view all the answers
What is the significance of medium-term forecasts in budgeting?
What is the significance of medium-term forecasts in budgeting?
Signup and view all the answers
How do long-term forecasts differ from short-term forecasts in sales management?
How do long-term forecasts differ from short-term forecasts in sales management?
Signup and view all the answers
Explain the Delphi Method used in qualitative forecasting.
Explain the Delphi Method used in qualitative forecasting.
Signup and view all the answers
What role does consumer feedback play in qualitative sales forecasting?
What role does consumer feedback play in qualitative sales forecasting?
Signup and view all the answers
Why is accurate sales forecasting critical for effective budgeting?
Why is accurate sales forecasting critical for effective budgeting?
Signup and view all the answers
What is the primary advantage of using the Salesforce Composite method in sales forecasting?
What is the primary advantage of using the Salesforce Composite method in sales forecasting?
Signup and view all the answers
How does Bayesian Decision Theory incorporate probabilities in its forecasts?
How does Bayesian Decision Theory incorporate probabilities in its forecasts?
Signup and view all the answers
In what way does the jury method differ from traditional forecasting techniques?
In what way does the jury method differ from traditional forecasting techniques?
Signup and view all the answers
What defines zero-based budgeting as a unique budgeting approach?
What defines zero-based budgeting as a unique budgeting approach?
Signup and view all the answers
What is the purpose of product testing and test marketing in the development process?
What is the purpose of product testing and test marketing in the development process?
Signup and view all the answers
How do rolling budgets differ from traditional static budgets?
How do rolling budgets differ from traditional static budgets?
Signup and view all the answers
What is an objective of activity-based budgeting?
What is an objective of activity-based budgeting?
Signup and view all the answers
What factors are typically considered in the selling expense budget?
What factors are typically considered in the selling expense budget?
Signup and view all the answers
Study Notes
Sales Forecasting Types
- Short-term forecasts cover periods up to three months and are used for production planning, where the overall sales trend is less important.
- Medium-term forecasts, typically for one year, are crucial for budget planning and have direct implications for business operations.
- Long-term forecasts, spanning three years or more, consider broader macro-environmental factors like regulations and economic trends.
Qualitative Forecasting Methods
- Consumer/User Survey Method: Involves asking customers about their potential purchases to gauge future demand.
- Panels of Executive Opinion (Jury Method): Experts from within or outside the company are consulted for their insights and forecasts.
- Salesforce Composite: Individual salespeople provide forecasts for their products, which are aggregated to create a company-wide forecast. This is a bottom-up approach.
- Delphi Method: A forecasting team, working independently, provides inputs to a project manager, who then gathers and analyzes the responses.
- Bayesian Decision Theory: Uses network diagrams and probability analysis to assess potential outcomes in a similar way to critical path analysis.
- Product Testing and Test Marketing: Involves limited marketing of a new or modified product in a specific region or market, commonly used for household goods.
Quantitative Forecasting Methods
- Moving Average: This method uses the average of previous sales data to forecast future sales.
Budgeting
- Zero-Based Budgeting: Starts from scratch, without referencing previous budgets, examining every expense.
- Strategic Budgeting: Focuses on identifying new opportunities and strategizing accordingly, with a proactive approach to budget allocation.
- Rolling Budgets: Continuously adjust and review previous budgets based on recent performance and future projections.
- Activity-Based Budgeting: Examines individual activities and assigns specific budgets to each for comprehensive financial planning.
Sales Budget Cost Elements
- Selling Expense Budget: Covers costs like sales expenses, training, salaries, and commissions.
- Advertising Budget:
- Percentage of last year’s sales
- Matching competitors' spending
- Affordable method, allocating available funds
- Objective and task method, determining expenditure based on marketing objectives
- Return on investment method, balancing costs with potential returns
- Incremental method, gradually increasing advertising outlay
- Administrative Budget: Covers expenses related to running the sales office, including marketing research and sales administration.
Budgetary Process
- The process involves a system of steps and checks for creating, reviewing, and approving budgets.
Sales Forecasting
- Short-term forecasts are for up to three months and are used for production planning.
- Medium-term forecasts are for one year and are crucial for budgeting.
- Long-term forecasts are used for three years or more and consider macro-environmental factors, such as government regulations and economic trends.
Qualitative Forecasting Methods
- Consumer/User Survey Method: Surveys customers about their likely purchases.
- Panels of Executive Opinion (Jury Method): Consult with industry experts who provide forecasts.
- Salesforce Composite (Bottom-up approach): Individual salespeople provide individual forecasts, which are then aggregated for a company forecast.
- Delphi Method: Uses a forecasting team that does not meet in person; a project manager asks questions to assess potential market changes and impacts on market share.
- Bayesian Decision Theory: Uses probabilities for each outcome to achieve the best results, similar to a network diagram critical path analysis.
- Product Testing and Test Marketing: Used for new or modified products, with limited marketing or region to gain feedback before a larger launch.
Quantitative Forecasting Methods
- Time-Series: Based on past data patterns that are used to predict future outcomes.
Budgeting
-
Types of budgets:
- Zero-based budgeting: Each budget is constructed without reference to previous budgets.
- Strategic budgeting: Focuses on identifying new opportunities.
- Rolling budgets: Evaluate previous months and forecast the next month.
- Activity-based budgeting: Examines each activity and budgets based on its individual needs.
Sales Budgets - Cost Elements
- Selling expense budget: Includes expenses such as sales training, salaries, and commissions.
-
Advertising budget: Considered using methods such as:
- Percentage of last year's sales.
- Parity with competitors.
- Affordable method.
- Objective and task method: Calculates budget based on achieving marketing goals.
- Return on investment method: Analyzes the potential return on investment for advertising.
- Incremental method: Analyzes the increase in sales attributed to advertising.
- Administrative budget: Includes expenses for running the sales office, such as marketing research and sales administration expenses.
Budgetary Process
- The budgetary process involves creating a detailed plan for how the company will allocate its resources.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Explore the various types of sales forecasting, including short-term, medium-term, and long-term approaches. Additionally, learn about qualitative forecasting methods such as consumer surveys and the Delphi Method, providing a comprehensive overview of the techniques used for effective sales predictions.
