Sales Forecasting and Budgeting
Businesses are forced to look well ahead in order to plan their investments, launch new products, decide when to close or withdraw products and so on. The sales forecasting process is a critical one for most businesses. Key decisions that are derived from a sales forecast include: - Employment levels required- Promotional mix- Investment in production capacity
Content
Sales Forecasting and Budgeting
Someone
Topics Covered
Planning Qualitative Techniques Quantitative Techniques: Time Series and
Casual Use of Computer Software in Sales-Forecast Budgeting: Purposes Alternative Types of Budgeting Budget Determination The Sales Budget Budget Allocation Conclusion
Forecasting: Base-line of Planning
Businesses are forced to look well ahead in
order to plan their investments, launch new products, decide when to close or withdraw products and so on. The sales forecasting process is a critical one for most businesses. Key decisions that are derived from a sales forecast include:
- Employment levels required - Promotional mix - Investment in production capacity
Types of Forecasts
There are two major types of forecasting, which
can be broadly described as macro and micro: Macro forecasting is concerned with forecasting markets in total. This is about determining the existing level of Market Demand and considering what will happen to market demand in the future. Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future.
Short-term Forecasts Medium Term Forecasts Long term Forecasts
FORECASTING
Appropriate production scheduling Reducing cost of purchasing R/M Determining appropriate price policy Setting sales targets and establishing
controls and incentives Evolving a suitable promotional program Forecasting short-term financial requirements
FORECASTING
Planning of a new unit or expansion of an
existing unit Planning of long-term financial requirements Planning of man-power requirements
Sales Forecasting
A sales forecast is a prediction of sales under a given set of conditions.
Sales forecasts are usually prepared under the direction of the top sales executive.
The sales budget is the result of decisions to create Conditions that will generate a desired level of sales.
Factors to Consider When Forecasting Sales
Es Bytimat Pas sal es m es ad t pa for e of tter ce sa l n s es
ing ns s rti alespla e dvnd s on A a ti mo pro
Ch pro an du ges c t in mi x
e the in t h s in nge s rices nge ices Cha ’s p r Cha ’s p f ir m f ir m
et arkrch M ea res udies st
C C om omp p acti etit act etit ionsors’ onsors’
l ra i c s ne om on Geon diti ec on c
Forecasting: Qualitative Techniques
Consumer/User Survey Method Panels of Executive Opinion Sales force Composite Delphi Method Bayesian Decision Theory Product Testing and Test Marketing
Quantitative Techniques: Time Series
Moving Averages Exponential Smoothing Time Series Analysis Z-Charts
Quantitative Techniques: Casual
Leading Indicators Simulation Diffusion Models
Use of Computer Software in SalesForecast
EXECUSTAT FOCA MINITAB RATS SAS/ETS SORITEC SPSS STATGRAPHICS STATPAC GOLD MS-EXCEL
Alternative Types of Budgeting
Zero based Budgeting Strategic Budgeting Rolling Budgets Activity based Budgeting
Sales Budget Components
Selling Expense Budget
Advertising Budget:
1. Percentage of last year Sales 2. Parity with Competitors 3. Affordable Method 4. Objective and Task Method 5. ROI Method 6. Incremental Method
Administrative Budget
The Sales Budget
Sales Forecast Sales Budget Administrative Budgets
Sales Department Budget Production Budget
Cash Budget Expenditures
Profit Budget Expenditure Revenues
Revenue
Salesforce Evaluation
Flow of Presentation
Introduction Sales force evaluation process Role of evaluation in sales management Setting performance standards
Introduction
Process
Why evaluation?
Setting Standards of Performance
The control process is based on comparison
of actual results with standards Standards provide a fair method of assessing and comparing performance The standards depends on
Region People Product
Thank You
Someone
Topics Covered
Planning Qualitative Techniques Quantitative Techniques: Time Series and
Casual Use of Computer Software in Sales-Forecast Budgeting: Purposes Alternative Types of Budgeting Budget Determination The Sales Budget Budget Allocation Conclusion
Forecasting: Base-line of Planning
Businesses are forced to look well ahead in
order to plan their investments, launch new products, decide when to close or withdraw products and so on. The sales forecasting process is a critical one for most businesses. Key decisions that are derived from a sales forecast include:
- Employment levels required - Promotional mix - Investment in production capacity
Types of Forecasts
There are two major types of forecasting, which
can be broadly described as macro and micro: Macro forecasting is concerned with forecasting markets in total. This is about determining the existing level of Market Demand and considering what will happen to market demand in the future. Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future.
Short-term Forecasts Medium Term Forecasts Long term Forecasts
FORECASTING
Appropriate production scheduling Reducing cost of purchasing R/M Determining appropriate price policy Setting sales targets and establishing
controls and incentives Evolving a suitable promotional program Forecasting short-term financial requirements
FORECASTING
Planning of a new unit or expansion of an
existing unit Planning of long-term financial requirements Planning of man-power requirements
Sales Forecasting
A sales forecast is a prediction of sales under a given set of conditions.
Sales forecasts are usually prepared under the direction of the top sales executive.
The sales budget is the result of decisions to create Conditions that will generate a desired level of sales.
Factors to Consider When Forecasting Sales
Es Bytimat Pas sal es m es ad t pa for e of tter ce sa l n s es
ing ns s rti alespla e dvnd s on A a ti mo pro
Ch pro an du ges c t in mi x
e the in t h s in nge s rices nge ices Cha ’s p r Cha ’s p f ir m f ir m
et arkrch M ea res udies st
C C om omp p acti etit act etit ionsors’ onsors’
l ra i c s ne om on Geon diti ec on c
Forecasting: Qualitative Techniques
Consumer/User Survey Method Panels of Executive Opinion Sales force Composite Delphi Method Bayesian Decision Theory Product Testing and Test Marketing
Quantitative Techniques: Time Series
Moving Averages Exponential Smoothing Time Series Analysis Z-Charts
Quantitative Techniques: Casual
Leading Indicators Simulation Diffusion Models
Use of Computer Software in SalesForecast
EXECUSTAT FOCA MINITAB RATS SAS/ETS SORITEC SPSS STATGRAPHICS STATPAC GOLD MS-EXCEL
Alternative Types of Budgeting
Zero based Budgeting Strategic Budgeting Rolling Budgets Activity based Budgeting
Sales Budget Components
Selling Expense Budget
Advertising Budget:
1. Percentage of last year Sales 2. Parity with Competitors 3. Affordable Method 4. Objective and Task Method 5. ROI Method 6. Incremental Method
Administrative Budget
The Sales Budget
Sales Forecast Sales Budget Administrative Budgets
Sales Department Budget Production Budget
Cash Budget Expenditures
Profit Budget Expenditure Revenues
Revenue
Salesforce Evaluation
Flow of Presentation
Introduction Sales force evaluation process Role of evaluation in sales management Setting performance standards
Introduction
Process
Why evaluation?
Setting Standards of Performance
The control process is based on comparison
of actual results with standards Standards provide a fair method of assessing and comparing performance The standards depends on
Region People Product
Thank You
