The essence of forecasting is to manage certain data. Differences between actual results and expected sales figures are nothing more than risks for the entire business. Moreover, they can philippines whatsapp be not only significant, but also fatal.
Why forecast sales
Sales forecasting is carried out for:
Setting business goals. In this case, the benchmark is the amount that the organization expects to receive at the end of the reporting period. Depending on this figure, the top management of the sales department plans bonuses for employees and the value of their KPI.
Cost reduction. By forecasting sales of goods, the costs of their production and logistics are optimized. If the plan is not fulfilled, these areas are the first to be cut.
Resource planning . When forecasters have information about how much money they will receive, they can more effectively plan the processes of purchasing raw materials, supplies and equipment, hiring employees to do the work, advertising costs and renting storage space.
Warehouse balance management. Having data on the expected profit, an understanding comes about what quantity of goods and at what price should be given for sale. This step does not allow the occurrence of a deficit or excess in the warehouse.
Forecasting a decline. To soften the blow to a business as a result of a decline in sales, it is necessary to take into account the reasons that led to such a result. For example, the seasonality of the business.