Sales Forecasting and

Budgeting
Someone
Topics Covered
Planning
Qualitative Techniques
Quantitative Techniques: Time Series and
Casual
Use of Computer Software in Sales-Forecast
Budgeting: Purposes
Alternative Types of Budgeting
Budget Determination
The Sales Budget
Budget Allocation
Conclusion
Forecasting: Base-line of
Planning
Businesses are forced to look well ahead in
order to plan their investments, launch
new products, decide when to close or
withdraw products and so on. The sales
forecasting process is a critical one for
most businesses. Key decisions that are
derived from a sales forecast include:

 - Employment levels required
- Promotional mix
- Investment in production capacity

Types of Forecasts
 There are two major types of forecasting, which
can be broadly described as macro and
micro:
 Macro forecasting is concerned with
forecasting markets in total. This is about
determining the existing level of Market
Demand and considering what will happen to
market demand in the future.
 Micro forecasting is concerned with detailed
unit sales forecasts. This is about determining
a product’s market share in a particular
industry and considering what will happen to
that market share in the future.

 Short-term Forecasts
 Medium Term Forecasts
 Long term Forecasts

FORECASTING

Appropriate production scheduling

Reducing cost of purchasing R/M
Determining appropriate price policy
Setting sales targets and establishing
controls and incentives
Evolving a suitable promotional program
Forecasting short-term financial
requirements


FORECASTING

Planning of a new unit or expansion of an

existing unit
Planning of long-term financial requirements
Planning of man-power requirements


 Sales Forecasting

A sales forecast is a prediction of sales

under a given set of conditions.

Sales forecasts are usually prepared under

the direction of the top sales executive.

The sales budget is the result of decisions to create

Conditions that will generate a desired level of sales.
Factors to Consider When Forecasting Sales

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Forecasting: Qualitative
Techniques

Consumer/User Survey Method

Panels of Executive Opinion
Sales force Composite
Delphi Method
Bayesian Decision Theory
Product Testing and Test Marketing

Quantitative Techniques: Time
Series
Moving Averages
Exponential Smoothing
Time Series Analysis
Z-Charts

Quantitative Techniques:
Casual
Leading Indicators
Simulation
Diffusion Models
Use of Computer Software in Sales-
Forecast

 EXECUSTAT
 FOCA
 MINITAB
 RATS
 SAS/ETS
 SORITEC
 SPSS
 STATGRAPHICS
 STATPAC GOLD
 MS-EXCEL
Alternative Types of Budgeting

Zero based Budgeting

Strategic Budgeting
Rolling Budgets
Activity based Budgeting
Sales Budget Components

 Selling Expense Budget



 Advertising Budget:
1. Percentage of last year Sales
2. Parity with Competitors
3. Affordable Method
4. Objective and Task Method
5. ROI Method
6. Incremental Method


 Administrative Budget
 The Sales Budget

Sales Forecast

Sales Budget

Sales Department Budget Production Budget Administrative Budgets

Cash Budget Profit Budget

Revenue Expenditures Expenditure Revenues

Salesforce Evaluation
Flow of Presentation
Introduction
Sales force evaluation process
Role of evaluation in sales management
Setting performance standards


Introduction
Process
Why evaluation?
Setting Standards of
Performance
The control process is based on comparison
of actual results with standards
Standards provide a fair method of
assessing and comparing performance
The standards depends on
Region
People
Product

 Thank You