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Definition

Sales forecast

A sales forecast is a projection of a firm’s sales for a specified period (such as a year), though most firms forecast their sales for two to five years into the future. It is the first forecast developed and is the basis for most of the other forecasts. A sales forecast for an existing firm is based on (1) its record of past sales, (2) its current production capacity and product demand, and (3) any factor or factors that will affect its future production capacity and product demand. To demonstrate how a sales forecast works.

Sales forecasting involves a consideration of various factors: (1) general economic conditions (2) industry trends (3) market research studies (4) anticipated advertising and promotion, (5) previous market share, (6) changes in prices, and (7) technological developments. The input of sales personnel and top management is essential to the sales forecast.

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