Factors affecting sales forecasting

1. FACTORS AFFECTING SALES FORECASTING
Presented to : Presented by :
Rinoj PK Sir Zameerul Islam
Department Of Business Administration GH-0264
Aligarh Muslim University Centre, Malappiuram 18MBAK-17

2. SALES FORECASTING
Sales forecasting is the process of estimating future sales.
Accurate sales forecasts enable companies to make informed business
decisions and predict short-term and long-term performance.

3. SALES FORECASTING FACTORS
Internal factors External factors
 Labour problems  Relative state of economy
 Inventory shortage  Direct and indirect competition
 Working capital shortage  Taste and preference of customer
 Price change  Consumer earnings
 Change in distribution methods  Population change
 new product line  Weather change

4. INTERNAL FACTORS
Factors that occur within the organization and are in control of the
organization.
These factors can changed accordingly to increase sales as well as
forecast.

5. INTERNAL FACTORS
Labour Problems
If an organization is facing some
sort labour problems such as
labour strike,etc then the sales
forecast of that organization will
automatically come down but if all
the labours of the organization are
working properly then then the
sales forecast of the organization
will be high.

6. INTERNAL FACTORS
Inventory Shortage
If the organization is facing
some sort of inventory or raw
material shortage then the sales
forecast of that organization will
be low as the more products are
not available with the
organization and vice-versa.

7. INTERNAL FACTORS
Working Capital Shortage
Working capital = current assets –
current liabilities
Since the production need day to day
need of working capital so, if the
working capital of an organization is
low then it’s sales forecast will be low
and vice-versa.

8. INTERNAL FACTORS
Price Change
The price of the product also plays a vital
role in the sales forecast of an organization.
If the organization is willing to increase the
price in future then the sales forecast of the
organization will be low and if the
organization is willing to decrease the prices
in future then the sales forecast will be high.

9. INTERNAL FACTORS
Change In Distribution Methods
If the organization changes it’s
distribution method then the
sales forecast of the organization
will fluctuate according to the
new method adopted.

10. INTERNAL FACTORS
New Product Line
If the company introduces new product
and hence increases it’s product line then
automatically the sales forecast will
increase and vice-versa.

11. EXTERNAL FACTORS
Factors that occur outside the organization and are not in control of the
organization.
These factors cannot be changed accordingly to increase sales as well
as forecast.

12. EXTERNAL FACTORS
Relative State Of Economy
The current state of economy plays a vital
role in the sales forcasting. If the
economy is at boom then the sales
forecast of the organization will be high
but if the economy is at recession then
the sales forecast will be low.

13. EXTERNAL FACTORS
Direct And Indirect Competition
Direct competition is a situation in which
two or more businesses offer products or
services that are essentially the same
while Indirect competition is the conflict
between vendors whose products or
services are not the same but that could
satisfy the same consumer need.

14. EXTERNAL FACTORS
Taste And Preference Of Customer
The change in taste and preferences of the
customers also effect the sales forecasting.
If the taste and preferences changes
towards the product the company
manufactures then the sales forecast will
increase and vice-versa.

15. EXTERNAL FACTORS
Consumer Earnings
If the consumer earnings or income
level of customers increases results
in the increase in sales forecast and
decrease in the level of consumer
earning decreases the sales forecast
accordingly.

16. EXTERNAL FACTORS
Population Change
The increase in population that are able to
buy your product results in the increase of
sales forecast and decrease in the
population that can buy your product
decreases the sales forecast.

17. EXTERNAL FACTORS
Weather Change
Change in weather condition also effect the
sales forecast of the company. The sales of
the umbrella increases in the rainy and
summer season but drops down in winters.