What is a Forecast?
It is the estimation and tracking of future sales.
Definition
A Forecast is the estimation and tracking of future sales of a product, typically using historical sales data and inputs from sales and marketing teams.
Purpose
To predict short and medium-term sales, detect problems early, find solutions quickly, reduce inventory, and improve customer service.
Methods
Forecasting can be done using both quantitative and qualitative data.
Quantitative Data
Uses historical sales data as a basis for predicting future sales, but does not guarantee future performance.
Qualitative Data
Relies on subjective assessments within the company, such as from sales and marketing teams, to inform the forecast.