The procedure for developing a sales forecast may be divided into five steps. Information should also be gathered about the controllable factors. This would be primarily the marketing effort that has been generally agreed on for use in the forecast period ahead. If these plans are significantly different from past efforts, their effect on future sales cannot be disregarded in developing the sales forecast. ABC Company gathers its forecasting information from polls and TV viewers.
Many firms use elaborate statistical techniques in their forecasting efforts.
Sometimes these produce more accurate sales forecast, and there is indeed something satisfying in the sophisticated use of numbers and complex mathematical models. Translating the sales forecast operationally through budgeting process-the forecast sales are broken down by volume and profit control units, such as product lines, territories, and so on. Specific targets are translated into operational programs such as marketing programs, production schedules, personnel needs and the like. During the forecast period and its end, actual and forecast sales are compared and discrepancies are analyzed Refining the forecast- when serious discrepancies occur between actual and forecast performance, the forecast and forecast procedure may need to be modified, and projections and adjustments reevaluated. There are some basic differences between demand and shipments.