What is a Sales Forecast?
A sales forecast is part of sales planning and is a prediction of the quantities of a product (or multiple products) that will be delivered in a future period. Instead of quantities, a sales forecast can also refer to future revenue. Another term for sales forecast is sales expectation.
The sales forecast is based on past sales figures and partially projects them into the future. Additional factors include industry experts’ opinions, the results of market research, and customer surveys. Furthermore, the phase of the product life cycle in which the product is currently positioned must be considered in the forecast. An accurate sales forecast significantly impacts a company’s procurement and production planning. Sales forecasts can be created manually or with the help of software, sometimes supported by artificial intelligence.
The main goals of the sales forecast:
- Early prediction of market developments to respond in a timely manner
- Align supply and demand
- Replace gut feeling with objective facts
- Reduce time spent through software support
