Question 1

Time series projections cannot be improved by making adjustments to eliminate seasonal effects.

Accepted Answer

Seasonal adjustments are designed to remove predictable patterns in a time series, and can improve the accuracy of projections by reducing the impact of seasonality on the forecast.

Question 2

Potential sales are the predictions of the actual volume that is expected in the future time period.

Accepted Answer

False

Question 3

The jury of executive opinion method can be done fairly quickly and allows the inclusion of many subjective factors.

Accepted Answer

The statement is true. The jury of executive opinion method is a quick and subjective method that allows executives to provide their opinions and insights on a particular issue or decision. It can include many subjective factors, which can be helpful in certain situations.

Question 4

The Buying Power Index expresses sales potentials in absolute rather than relative terms.

Accepted Answer

The Buying Power Index (BPI) typically expresses sales potentials in relative terms, comparing different areas or regions to understand their market potential based on factors like income, population, and retail sales, rather than providing an absolute dollar figure.

Question 5

For best results, always seasonally adjust time series data.

Accepted Answer

Seasonal adjustment is not always necessary or appropriate for all time series data. It depends on the specific analysis goals and whether seasonal patterns obscure the underlying trends or patterns of interest.

Question 6

The sales budget is usually prepared before the sales forecast.

Accepted Answer

The sales forecast is usually prepared before the sales budget. The sales forecast is an estimate of the expected sales volume and revenue for a particular period, whereas the sales budget is a detailed plan that outlines the allocation of resources to achieve the sales goals identified in the sales forecast. Therefore, it makes sense to prepare the sales forecast first and then use it as a basis for developing the sales budget.

Question 7

Actual sales are normally equal to potential figures.

Accepted Answer

Actual sales may be lower or higher than potential figures due to various external factors such as competition, economic conditions, and consumer behavior.

Question 8

The Buying Power Index includes such factors as disposable personal income, retail sales, and populations.

Accepted Answer

The Buying Power Index does indeed include factors such as disposable personal income, retail sales, and populations.

Question 9

"Sales potential" represents the sales volume a firm expects to achieve.

Accepted Answer

The answer of "Sales potential" represents the sales volume a...

Question 10

Managers rarely need forecasts for designing sales territories.

Accepted Answer

Managers do need forecasts for designing sales territories as it helps them allocate resources effectively and make informed decisions about staff, marketing strategies, and sales goals for each territory.

Question 11

When forecasting sales, leading indicators work well for products whose sales are influenced by basic changes in the economy.

Accepted Answer

Leading indicators are economic factors that tend to predict future economic activity, such as changes in employment or consumer spending. Products whose sales are influenced by these basic changes in the economy are more likely to be accurately forecasted using leading indicators.

Question 12

With the sales force composite method, salespeople project sales volumes for customers in their own territory, and then the aggregated estimates are reviewed by higher management.

Accepted Answer

The statement accurately describes the sales force composite method.

Question 13

Actual industry sales are usually less than market potential.

Accepted Answer

Market potential represents the total possible sales in a market for a given product. Actual industry sales are usually less than this potential due to factors such as competition, pricing, market saturation, and consumer behavior.

Question 14

Leading indicators are typically better than other forecasting techniques in predicting turns in a series of sales figures.

Accepted Answer

Leading indicators are early signals that suggest a change is likely to happen in the future, making them effective in predicting changes or turns in sales figures. Other forecasting techniques may not be able to detect these subtle shifts with the same level of accuracy.

Question 15

The sales force composite method is especially popular with consumer goods firms because optimistic and conservative forecasts balance out due to the large number of customers.

Accepted Answer

The sales force composite method is primarily used because salespeople are considered to have the closest contact with the market and customers, not because optimistic and conservative forecasts balance out due to the large number of customers.

Question 16

Sales force composite methods involve regression analysis.

Accepted Answer

Sales force composite methods involve estimates from individual salespeople about expected sales, not regression analysis. Regression analysis is used in other forecasting methods, such as econometric models.

Question 17

Business market potentials can be computed from data made available through the U.S. Census of Manufacturers.

Accepted Answer

The U.S. Census of Manufacturers provides data on the manufacturing sector, including production and sales data, which can be used to assess business market potentials.

Question 18

The estimation of sales potential can be made using such things as the Buying Power Index and NAICS codes.

Accepted Answer

The Buying Power Index and NAICS codes are both commonly used methods for estimating sales potential. The Buying Power Index measures the buying power of a geographic area by analyzing factors such as income, population, and consumer expenditures, while NAICS codes classify businesses into industry categories for market research purposes. Both of these tools can be helpful in estimating the potential for sales within a given market.

Question 19

Potentials are the minimum possible sales for all sellers of goods or services.

Accepted Answer

Potentials are not the minimum possible sales, but rather the maximum possible sales that can be achieved by all sellers of goods or services.

Question 20

The Buying Power Index is a widely employed measure of sales potential for business markets.

Accepted Answer

The answer of The Buying Power Index is a widely...

Quiz 14: Estimating Potentials and Forecasting Sales