3.3 Sales forecasting (HL only)

Sales forecasting

• Is the process of estimating future revenue by predicting how much of a product or service will sell in a given time period.

Advantages

• Can drive strategic planning in a business.
• Businesses can identify future opportunities.
• Minimizes risks.
• Identifies trends and enables preparation for them.

Disadvantages

• Is a prediction so it may mislead businesses.
• Are less accurate the further you forecast.
• Reliable forecasting relies on reliable data input.
• Qualitative factors are mostly ignored.