Session 2 SALES FORECAST Annual Method

4 Methods of Sales Forecasting
Annual Data Method:
All calculations are first made using the total sales for each year. Then sales forecasts are given detail using calculations for the month or week depending on the company's needs
Non-annual data method:
With this method, we start first using monthly or weekly data to find the sales forecast
Rolling total method:
We take the historical data and create a new rolling set that adds a new month and drops the oldest month to obtain a new total. The forecast for the next year is made from these groups of sliding data
Causal or correlation method
We look for an external variable that could explain our sales and on which we have reliable data. If we find a strong link or relationship using a calculation, we then calculate the forecast based on the external variable to forecast our sales

1st method : Sales forecasted based on ANNUAL DATA
We use total annual historical sales data to calculate the sales forecast for the next year.

1st Method : Sales Forecasting based on Annual Data

1st Method : Sales Forecasting based on Annual Data
The following unit sales quantities were observed over the last 12 quarters.
Assuming that you use the linear adjustment method based on annual values,
what will be the sales forecast by quarter for Year 4?

Sales Forecasting based on Annual Data - Linear Adjustment
Calculation of the equation of the line: y = ax + b
where x = number of the year and y = Annual units sold
To find the forecasted units for year 4, x = number of the year 4
Calculation of a monthly /quarterly/weekly seasonal factor:
sum or average for the month (quarter, week...) / sum or average for the year
Month sales forecast (quarter, week...) =.
Forecast for the year X monthly seasonal factor (quarterly, weekly...)

Assuming that you use the linear adjustment method based on annual values, what will be the sales forecast by quarter for Year 4?