Automobile Sales Forecasting
Methods and Techniques of Sales Forecasting by Kenneth Hamlett, Demand Media
Sales forecasting methods and techniques vary from company to company.
Every company that uses sales forecasts possesses its own technique to approach the forecasting process. Some companies have a dedicated team of forecast professionals while others use the sales staff to generate the forecast. The statistical methods used to generate the sales forecast depend on the demand profile of the product. Statistical forecast methods vary widely and finding the right method often boils down to trial and error.
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Decomposition stands as one of the most common statistical sales forecasting methods. Decomposition belongs to the time series family of forecasting methods. Decomposition looks at four variables that control the value of “x” over a certain time period. In simpler terms, decomposition uses a product’s trend component, cyclical component, seasonality and irregular components to forecast the future value of the product over a given time period. Decomposition looks at each component separately to determine a forecast value for the specified component and then combines the data output into an overall forecasted value. A variety of statistical decomposition methods exist.
Simple Exponential Smoothing
Unlike decomposition, which uses the entire history of a product as the forecast input, simple exponential smoothing uses a weighted moving average. Because simple exponential smoothing seeks to reduce, or smooth out, the irregular patterns in a product over time, this forecasting method works best with products whose main component exhibits strong cyclical and irregular patterns.
Census X-11
Census X-11 resembles a standard decomposition method because it uses the same variables trend, seasonality, cyclicality and
Sales forecasting methods and techniques vary from company to company.
Every company that uses sales forecasts possesses its own technique to approach the forecasting process. Some companies have a dedicated team of forecast professionals while others use the sales staff to generate the forecast. The statistical methods used to generate the sales forecast depend on the demand profile of the product. Statistical forecast methods vary widely and finding the right method often boils down to trial and error.
Sponsored Link
QuickBooks From Intuit
Intuit QuickBooks is now in India. A Must Software for SMEs. Try Free! quickbooks.in Decomposition
Decomposition stands as one of the most common statistical sales forecasting methods. Decomposition belongs to the time series family of forecasting methods. Decomposition looks at four variables that control the value of “x” over a certain time period. In simpler terms, decomposition uses a product’s trend component, cyclical component, seasonality and irregular components to forecast the future value of the product over a given time period. Decomposition looks at each component separately to determine a forecast value for the specified component and then combines the data output into an overall forecasted value. A variety of statistical decomposition methods exist.
Simple Exponential Smoothing
Unlike decomposition, which uses the entire history of a product as the forecast input, simple exponential smoothing uses a weighted moving average. Because simple exponential smoothing seeks to reduce, or smooth out, the irregular patterns in a product over time, this forecasting method works best with products whose main component exhibits strong cyclical and irregular patterns.
Census X-11
Census X-11 resembles a standard decomposition method because it uses the same variables trend, seasonality, cyclicality and