Question 1

A sales forecast is the key factor in all operational planning.

Accepted Answer

A sales forecast provides an estimate of future sales and revenue, which is critical for businesses to plan their operations, including production, staffing, and budgeting. It helps in setting realistic goals and making informed decisions to achieve those goals. Therefore, a sales forecast is a crucial factor in all operational planning.

Question 2

NAICS is a system that forecasts sales for multinational companies.

Accepted Answer

NAICS (North American Industry Classification System) is a classification system used by statistical agencies in Canada, Mexico, and the United States to classify business establishments according to the type of economic activity in which they are engaged. It is not a system that forecasts sales for multinational companies.

Question 3

An example of the survey method of sales forecasting is the use of test markets.

Accepted Answer

Test markets are an example of the experimental method, not the survey method, as they involve testing a product in a specific market area to gauge its potential success.

Question 4

The number of secretaries is a basic market factor for desktop computer sales.

Accepted Answer

The number of secretaries is not a basic market factor for desktop computer sales. Basic market factors for desktop computer sales include things like technology advancements, consumer needs and preferences, and overall economic conditions.

Question 5

A customer analysis determines who will buy the product,not who will use it.

Accepted Answer

Customer analysis often includes understanding both who will buy the product and who will use it, as these groups can be different (e.g., parents buying toys for children) and understanding both is crucial for effective marketing and product development.

Question 6

The sales forecast is independent of the marketing program.

Accepted Answer

The sales forecast is not entirely independent of the marketing program. The marketing program can have an impact on the sales forecast by influencing customer demand and behavior. The effectiveness of the marketing program can directly affect the sales forecast.

Question 7

You cannot test market an industrial product.

Accepted Answer

It is possible to test market an industrial product, just as it is possible to test market any other type of product. The process may require different strategies than testing a consumer product, but it can still be done through market research, focus groups, or limited product release to a specific group of customers.

Question 8

Market potential is the maximum market share that an individual firm can expect to achieve.

Accepted Answer

Market potential refers to the total demand for a product or service within a given market, and is not limited to the potential market share of one individual firm.

Question 9

Freight carloadings is a basic market factor underlying the sales of steel.

Accepted Answer

The answer of Freight carloadings is a basic market factor...

Question 10

Marketing goals must be established before a forecast can be made.

Accepted Answer

Marketing goals provide the direction and purpose for a forecast, as they determine the desired outcomes and metrics for success. Without established goals, a forecast would lack guidance and relevance.

Question 11

The determination of sales forecasts is an iterative process.

Accepted Answer

The determination of sales forecasts involves continuous monitoring, reviewing and updating based on changing market conditions and customer demand. Therefore, it is an iterative process rather than a one-time event.

Question 12

The sales forecast is usually the responsibility of the sales manager.

Accepted Answer

The sales forecast is typically the responsibility of the sales manager as they are responsible for setting sales goals, developing strategies for achieving those goals, and monitoring and reporting on sales performance.

Question 13

Retailers are not willing to share their scanner data with suppliers.

Accepted Answer

Retailers often share scanner data with suppliers to improve inventory management, forecast demand more accurately, and enhance the overall supply chain efficiency. This collaboration can lead to better product availability and customer satisfaction.

Question 14

Test markets are a means of estimating a product's market potential.

Accepted Answer

Test markets are designed to help companies gauge consumer interest and demand for a new product in a controlled setting before launching it to the broader market. By testing the product in a limited geographic area, companies can gather important information on how the product is perceived, how it performs, and what sales potential it might have. Based on these findings, companies can make informed decisions about how to proceed with the product's development and marketing.

Question 15

The sales forecast is derived from the sales budget.

Accepted Answer

The sales forecast is an estimate of future sales and is used to create the sales budget, not derived from it. The sales budget is developed based on the sales forecast.

Question 16

The use of regression analysis for forecasting sales always requires the existence of some sort of sales history.

Accepted Answer

Regression analysis is a statistical method used to model the relationship between a dependent variable and one or more independent variables. Therefore, it requires data for both the dependent and independent variables. In the case of forecasting sales, the dependent variable would be sales, and the independent variables would be factors that impact sales such as advertising spend, seasonality, or economic indicators. Sales history is necessary to create a model and make accurate predictions about future sales.

Question 17

Sales potential is the total expected sales of a given product for the entire industry.

Accepted Answer

The answer of Sales potential is the total expected sales...

Question 18

A market index is a market factor expressed in a quantitative form relative to some base figure.

Accepted Answer

A market index is a quantifiable market factor that is used to measure the performance of a particular market or sector relative to a base figure, such as a benchmark or average value. Examples of market indices include the S&P 500, Dow Jones Industrial Average, and NASDAQ Composite Index.

Question 19

The use of mathematical models is the most popular forecasting method.

Accepted Answer

Mathematical models are widely used in forecasting due to their accuracy and flexibility. They are capable of making predictions based on historical data and can help to identify trends and patterns to inform future decisions. However, there are other methods of forecasting, such as qualitative methods (expert opinions and subjective judgments) and time series analysis.

Question 20

Questionnaire surveys are a good means of forecasting sales.

Accepted Answer

Questionnaire surveys can provide valuable information regarding customer preferences and attitudes, but they may not necessarily provide accurate forecasts of sales. Other factors such as economic conditions, competition, and marketing efforts also play a significant role in determining sales. Therefore, relying solely on questionnaire surveys for sales forecasting may not be reliable.

Quiz 12: Sales Forecasting and Developing Budgets