This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: A sales forecast is a prediction based on past sales performance and an analysis of expected market conditions. The true value in making a forecast is that it forces us to look at the future objectively. The company that takes note of the past stays aware of the present and precisely analyzes that information to see into the future. There are many risks that a sales forecast may include. The degree of accuracy required in the decision making is essential. If the decisions that are to be made on the basis of the sales forecast have high risks attached to them, then it stands to reason that the forecast should be prepared as accurately as possible. In some cases the availability of data and information is minimal or not accessible. In some markets there is a wealth of available sales information (e.g. clothing retail, food retailing, holidays); in others it is hard to find reliable, up-to-date information. Another issue that may be encountered is the time horizon that the forecast intends to cover. For example, are we forecasting next weeks' sales, or are we trying to forecast what will happen to the overall size of the market in the next five years. Another risk possibility is the products life forecast what will happen to the overall size of the market in the next five years....
View Full Document
- Spring '09
- Financial Accounting