A company's sales forecast is likely to be less than its sales potential when:
A)Plant capacity is too small to produce as much as the potential.
B)The firm's distribution system is limited so the company cannot reach all its potential market.
C)Management is anxious to sell all the market will absorb.
D)Any or All of these occur.
E)Either A or B may be correct.

Question

Quizplus · Accepted Answer

Both options A and B can lead to a company's sales forecast being less than its sales potential. If a company's plant capacity is too small, it will not be able to produce as much as it could if it had a larger plant. Similarly, if a company's distribution system is limited, it will not be able to reach all of its potential market, which will limit its sales potential. Therefore, either A or B may be correct. Option C is not necessarily true, as management may be trying to sell more than the market can absorb, which would lead to an overly optimistic sales forecast. Option D may be a valid choice, but not the best one, as it is too broad and not specific to the question.

A Company's Sales Forecast Is Likely to Be Less Than