Ideally the sales forecasting process needs different kinds of information from different departments. This could be done by integrating different departments by means of common information system. The business functions of departments like production, sales, purchasing, planning, finance and logistics, supply chain department are different ones, the strategies used by them also differ. While integrating the functions, all the departments share their information on a central information system which is joined with central database warehouse. As all functions work towards the same target, sharing information facilitates productive work. Coordination can be achieved by a central information system. Furthermore, sales forecasting also runs on information like marketing, sales, production planning and logistics. All departments need the sales forecasting to plan their activities effectively. Integration of coordination may be the best way to achieve integrated and interactive forecast. The managers at the different functional areas will make the decisions using the data available in the central repository. The activities that can be forecast in the area of marketing are annual plans, product changes, promotional changes, channel placement and pricing; in the area of sales, identifying the sales target for the sales force; and in the area of finance, accounting projects the cost and profit needs and the capital needs; in the area of production and purchasing are planning the development of plant and equipment; and finally in the area of logistics and planning the development of storage facilities and transportation and equipment and specific decisions of what product to move to what location. In order to predict and take the decisions in different functional areas different forecasting techniques can be used which are discussed in this course.
Upon completion of this course, you should be able to explain;
- Forecasting methods: an overview
- Direct extrapolation of sales
- Causal approaches to sales forecasting
- New product forecasting
- Evaluating and selecting methods
- Estimating prediction intervals