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Forecasting Sales

Posted on | January 17, 2013 | Comments Off on Forecasting Sales

One of the most important parts before you start a business, is trying to estimate the potential demand that business will have the first years. Due to perform this estimate is perhaps a bit complicated, many people do not, but in this article I will try to explain, at least the theoretical part of the different methods of prediction for plans of business or market studies. We’ll talk only of quantitative prediction techniques, which are usually the most reliable. Simple linear regression: Suppose that you want to predict the sales of your business, in this case sales would be variable and, and will also use the expenses in advertising, in this case would be the variable X. Then the prediction for sales of your business model is Y = P+bX, or sales = P+b advertising. Or I will go into detail of how to find these numbers, but suppose that you hire an economist to calculate them, then you when you have these numbers, may override on the equation quantity which intend to invest in advertising, and will have sales expected in that period of time.

The regression is perhaps the most widely used, because many important things for businesses can be estimated. The moving averages method: is a very simple technique, where are estimated future sales, by calculating the weighted average of the past years, but where the most recent years have more influence on the average. I.e., the past years have one greater weighting to the oldest, the menara average is more accurate than a normal average.It recalls that the prediction of sales must be in your plan or business by law project, serves for better resource management planning, and you’ll be more prepared to deal with problems of raw. Prediction of sales is a way to better manage the resources of the business, there are many other ways of doing this, but it is very important to know what your potential demand. Original author and source of the article.


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