DETERMINING SALES FORECASTS

Topics: Future, Forecasting, Average Pages: 9 (626 words) Published: March 11, 2015
DETERMINING SALES FORECASTS

sales forecast- when you predict the number of guests you will serve and the revenues they will generate in a given future time period actual sales can be determined for a current time period by using a computerized system called a point of sales (POS) system that has been designed to provide specific sales information. sales volume-number of units sold

Advantages of Precise Sales Forecasts
1. Accurate revenue estimates
2. Improved ability to predict expenses
3. Greater efficiency in scheduling needed workers
4. Greater efficiency in scheduling menu item production schedules 5. Better accuracy in purchasing the correct amount of food for immediate use 6. Improved ability to maintain proper levels of nonperishable food inventories 7. Improved budgeting ability

8. Lower selling prices for guests because of increased operational efficiencies 9. Increased dollars available for current facility maintenance and future growth 10. Increased profit levels and stockholder value

IMPORTANCE OF FORECASTING SALES

Sales History
-the systematic recording of all sales achieved during a predetermined time period sales to date- the cumulative total of sales reported in the unit
-is the number we get when we add today’s sales to the sales of all prior days in the reporting period

Sales history

Computing Averages for Sales Histories

An average is defined as the value arrived at by adding the quantities in a series and dividing the sum of the quantities by the number of items in the series

Two major types of average

1. Fixed average
2. Rolling average

A fixed average is an average in which you determine a specific time period, for example, the first 14 days of a given month, and then you compute the mean or average amount of sales or guest activity for that period The rolling average is the average amount of sales or volume over a changing time period

-the rolling average is computed using data that will change regularly

Recording Revenue, Guest Counts, or Both?

Guest counts, the term used in the hospitality industry to indicate the number of people served, is recorded on a regular basis. For many other foodservice operations, sales are recorded in terms of sales revenue generated

Operation is best managed by tracking both revenue and guest counts. To compute average sales per guest, a term also known as check average, you need both of the revenue and the guest count
An average sale per guest is determined by the following formula:

The manager of Brothers’Family Restaurant has decided to monitor and record the following:

1. Sales
2. Guests served
3. Average sales per guest

The correct computation is a weighted average, that is, an average that weights the number of guests with how much they spend in a given time period.

Weighted Average

Maintaining Sales Histories

Your sales histories should be kept for a period of at least two years. This allows you to have a good sense of what has happened to your business in the recent past. Of course, if you are the manager of a new operation, or one that has recently undergone a major concept change, you may not have the advantage of reviewing meaningful sales histories. If you find yourself in such a situation, it is imperative that you begin to build and maintain your sales histories as soon as possible so you will have relevant data on which to base your future managerial decisions.

sales variances-changes from previously experienced sales levels, will give you an indication of whether your sales are improving, declining, or staying the same

Sales history and Variance

Predicting Future Sales
Revenue History

First Quarter Revenue Forecasts

Future Guest Counts
Guest Count History

First-Quarter Guest Count Forecast

Future Average Sales per Guest

First-Quarter Average Sales per Guest Forecast
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