Quantitative Sales Forecasting

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    Quantitative Sales Forecasting

    Time series Data:

    1. Trend
    2. Seasonal Fluctuations
    3. Cyclical Fluctuations
    4. Random Fluctuations

    Identifying the trend: An analysis of figures will tell a business whether there is an upward, downward or constant trend. Identifying the trend, allows the business to predict what is likely to happen in future. The first step is to smooth out the raw data.

    Moving Average:

    3 years:

    1. (Sum of the chosen 3 years)/3
    2. Plot at centre year

    4 years:

    1. (Sum of the chosen 4 years)/4
    2. Plot at 2.5 N (N being the years)

    Line of Best fit:

    1. Should have an equal amount of points on each side
    2. Pass through point (X, Y)
    3. X= sum(X) {Total Years} / Number of Years
    4. Y = Sum(Y) {The total sales in the trend}/ Number of years

     

    Variation from the Trend: Actual sales – trend

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