Forecast (t + 1) = c + εt + α1 x Sales (t) + α2 x Sales (t – 1) + α3 x Sales (t – 2),
Where:
εt – white noise;
α(X) – set of coefficients;
c is a constant.
Future sales are built on the philippines whatsapp basis of past data by selecting multiple sets of coefficients.
The emergence of such methods as Arima + MA (autoregression + mean) and SARIMA: AR + MA + seasonal component is due to the fact that autoregression methods have begun to expand. There are now many methods that can be used to select a model for a specific product.
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The most popular methods of sales forecasting
There are many methods for analyzing and forecasting retail sales. Sometimes, heads of organizations develop their own method, based on their experience, product features, etc. Moreover, these methods are often simpler than generally accepted ones and are more in demand.
Forecasting by sales funnel stage
In this case, the following pattern exists: the further the deal is in the sales funnel, the higher the probability of its closure.
Example.
The probability of closing based on the sales funnel is:
Initial call - 5%.
Client qualification – 10%.
Product demonstration – 35%.
Trial version of the product – 60%.
Final call – 80%.
The deal is closed – 100%.
Forecasting by sales funnel stage
To forecast sales volumes in accordance with this method, it is necessary:
Determine the reporting period, which depends on the length of the sales cycle. Typically, this is a month, quarter or year.
Find the product of the potential value of each transaction and the probability of closing.
Sum up the results for each transaction and form an overall forecast.
The main advantage of this method is the ease of creating forecasts, the disadvantage is possible calculation errors. It should be used with caution, since buyers' behavior is subject to inertia. So, if a person continues to move along the sales funnel, this does not mean that everything suits him. Often, promotion is carried out out of habit or with the hope that things will get better. In this regard, the deal often falls through at the penultimate stage of the sales funnel.