Your firm has accumulated a very comprehensive database of historical sales data

Question

Your firm has accumulated a very comprehensive database of historical sales data that your manager wants to make sure you use in this year's sales forecast. She wants to make sure you consider any past sales trends, seasonal factors, or random variations in sales performance to enhance the accuracy of this and future years' sales forecasts. Following your manager’s suggestions would require that you consider a number of different factors related to historical sales data. Which of the following statements are true regarding forecasting sales based on historical data? Most firms will use multiple sales forecasting methods to address variations in time and scope. Cycle analysis uses sales data over longer periods of time to identify whether sales fluctuate in a consistent pattern. To evaluate variations in sales performance due to different periods in a year, the marketer should use a random factor analysis. Sales forecasts for new products can be developed effectively using regression analysis. Using a market test to forecast sales can be effective. However, these tests can be time consuming and very expensive.

Explanation / Answer

The following statement is true regarding forecasting sales based on historical data - Most firms will use multiple sales forecasting methods to address variations in time and scope. This is done to improve accuracy. Quantitative methods of forecasting are used to forecast future sales based on historical sales data.

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.