Description
It tells forecasting process,management approach,techniques and measurement
SALES FORECASTING
?
A projection into the future of expected demand, given a stated set of environmental conditions.
WHAT IS SALES FORECASTING?
Sales Potential ? Operational Plans ? Sales Quotas
?
HOW DIFFERENT IT IS FROM
ACTIVITIES AND GOALS
ACTIVITY Sales Forecasting Accuracy Operational Plan Quota Setting
GOAL
Effectiveness & Efficiency Meet or Exceed
Marketing
Plans in $ for products
Sales
Goals for selling unit Plans for plant, equipment, production runs, material Cost and Profit projections and capital requirement
Sales Forecast
Production
Finance /Accounting
FORECAST IS STARTING POINT
HRD
Manpower Planning
?
Organizing and efficient and effective conduct of the business of developing and using sales forecasts Components
? ? ? ? ?
Environment Systems Management Techniques Performance Measurement
?
SALES FORECASTING PROCESS
FORECASTING PROCESS
Environment
Context Systems Management Approach
Performance Measurement
Company
Techniques
Orders, shipments, marketing factors, Competitor Factors, Economic factors etc
ENVIRONMENT AND FORECASTING Environment
Market
Company Actions Competitor Actions
Actions by suppliers, Distributors and governments
Market Share Costs Sales
Profits
From Principles of Forecasting by J S Armstrong
MANAGEMENT APPROACH
Independent Approach
Each department develops its own forecast. Time Horizons may not be the same Lack of functional integration. Lack of Communication Hinders corporate level planning.
Concentrated Approach
Forecasting is done by one department. Communication exists and formal meetings are also held. Lack of functional integration There may be bias towards any one department Lack of expertise on all departments.
Negotiated Approach
Each department develops its own forecast Representatives from departments meet at regular intervals Communication exists but no collaboration. Not driven by common goal and objectives. Political element may influence
Consensus Approach
A committee represented by a member from each dept is in charge of forecasting.
Better communication, collaboration and coordination Costly in terms of time and personnel.
Collect Data
Develop Forecast
Send Forecast to Sales
Review Forecast
Incorporate Sales changes
Send Forecast to Marketing
Review Forecast
Incorporate Marketing changes
EXAMPLE : A SYSTEM IN PLACE
Send Forecast to Management
Review Forecast
Incorporate changes and release to planning
? Why a System ? SYSTEM
? Not everything is known by every person. ? Data is available in bits and pieces in different places. ? Need to aggregate and disaggregate at different times and levels.
TECHNIQUES & MEASUREMENT
?
Methods / Algorithms used for Forecasting
? Quantitative ? Qualitative
?
Performance Measurement
? Accuracy
THE SALES MANAGER & FORECASTING
The Context of Forecast ? The Variables?
Where are we ? How did we get here ? Where are we heading ? Are we doing OK ? How to improve ?
Internal / External Controllable / Not Controllable
The Sales Manager Methods to Use /Available? Statistical Qualitative
Other Considerations? Cost of Forecast Accuracy Required Time Horizon
? ? ?
?
? ?
Sales Force Composite Chain Ratio End Use Method Expert Opinion Delphi Technique Executive Opinion
Non Statistical Methods
doc_641871966.ppt
It tells forecasting process,management approach,techniques and measurement
SALES FORECASTING
?
A projection into the future of expected demand, given a stated set of environmental conditions.
WHAT IS SALES FORECASTING?
Sales Potential ? Operational Plans ? Sales Quotas
?
HOW DIFFERENT IT IS FROM
ACTIVITIES AND GOALS
ACTIVITY Sales Forecasting Accuracy Operational Plan Quota Setting
GOAL
Effectiveness & Efficiency Meet or Exceed
Marketing
Plans in $ for products
Sales
Goals for selling unit Plans for plant, equipment, production runs, material Cost and Profit projections and capital requirement
Sales Forecast
Production
Finance /Accounting
FORECAST IS STARTING POINT
HRD
Manpower Planning
?
Organizing and efficient and effective conduct of the business of developing and using sales forecasts Components
? ? ? ? ?
Environment Systems Management Techniques Performance Measurement
?
SALES FORECASTING PROCESS
FORECASTING PROCESS
Environment
Context Systems Management Approach
Performance Measurement
Company
Techniques
Orders, shipments, marketing factors, Competitor Factors, Economic factors etc
ENVIRONMENT AND FORECASTING Environment
Market
Company Actions Competitor Actions
Actions by suppliers, Distributors and governments
Market Share Costs Sales
Profits
From Principles of Forecasting by J S Armstrong
MANAGEMENT APPROACH
Independent Approach
Each department develops its own forecast. Time Horizons may not be the same Lack of functional integration. Lack of Communication Hinders corporate level planning.
Concentrated Approach
Forecasting is done by one department. Communication exists and formal meetings are also held. Lack of functional integration There may be bias towards any one department Lack of expertise on all departments.
Negotiated Approach
Each department develops its own forecast Representatives from departments meet at regular intervals Communication exists but no collaboration. Not driven by common goal and objectives. Political element may influence
Consensus Approach
A committee represented by a member from each dept is in charge of forecasting.
Better communication, collaboration and coordination Costly in terms of time and personnel.
Collect Data
Develop Forecast
Send Forecast to Sales
Review Forecast
Incorporate Sales changes
Send Forecast to Marketing
Review Forecast
Incorporate Marketing changes
EXAMPLE : A SYSTEM IN PLACE
Send Forecast to Management
Review Forecast
Incorporate changes and release to planning
? Why a System ? SYSTEM
? Not everything is known by every person. ? Data is available in bits and pieces in different places. ? Need to aggregate and disaggregate at different times and levels.
TECHNIQUES & MEASUREMENT
?
Methods / Algorithms used for Forecasting
? Quantitative ? Qualitative
?
Performance Measurement
? Accuracy
THE SALES MANAGER & FORECASTING
The Context of Forecast ? The Variables?
Where are we ? How did we get here ? Where are we heading ? Are we doing OK ? How to improve ?
Internal / External Controllable / Not Controllable
The Sales Manager Methods to Use /Available? Statistical Qualitative
Other Considerations? Cost of Forecast Accuracy Required Time Horizon
? ? ?
?
? ?
Sales Force Composite Chain Ratio End Use Method Expert Opinion Delphi Technique Executive Opinion
Non Statistical Methods
doc_641871966.ppt