Class 4 - prep reading Forecasting tutorial

Forecasting sales and production Forecasting requires a little math and a little logic. For example, does your forecast predict your product will take half a segment’s sales when there are four or five products in the segment? Unless your product’s positioning, age and MTBF are significantly superior to the other products – and your price is at the low end of the range – it is not likely that you will take half the sales. Does your forecast predict you will take only one tenth of the sales when there are four or five products in the segment? Unless your product’s positioning, age and MTBF are significantly inferior – and your price is at the high end of the range or above – chances are you can sell more. 1. The Basic Method Here is a basic method (sometimes called the Gross Estimate) for conducting a sales forecast: The Industry Demand Analysis in the Situation Analysis (Form 3 on p. 29 of the Student Guide) provides close approximations of segment demand for each round. Products can enter or leave the segments; however the demand projections will not change. Alternatively, the Statistic boxes on the Segment Analysis pages (pages 5 - 9) of The Capstone Courier report the last year’s demand (the year just ended as of the date of the Capstone Courier) and the segment growth rate. Multiplying that last year’s demand by the growth rate will calculate the demand for the upcoming year. Determine Average Demand Use the Industry Demand Analysis to ...