Short Term Sales Forecasting

A very important object of Sales Forecasting is the best utilization of machines so that more production may be obtained during the period of high demand and the machines may not remain idle during the period of low demand.

The sales forecast gas a horizon defined by the order cycle time from the plant to the facility and thus can be extremely short-term (often monthly, weekly, or in some extreme cases, daily forecasts).

Typically, sales forecast a few months ahead are required for a large number of product lines. The attraction of exponential smoothing is that it is quickly and easily implemented, forecast being generated routinely, except perhaps in a few cases where there is evidence of unsatisfactory forecast quality.

Both short-term and long-term forecasts are useful. Short-term forecast, usually one season or shorter for agribusiness firms, are useful in formatting current operating plans. In food firms, such forecasts may be weekly or daily. In a food service firm, forecast may even be hourly as the firm works to schedule food preparation to accommodate daily sales patterns.
Short Term Sales Forecasting

Short-term demand forecasting

Demand forecasting is the process of finding out the likely demand for a firm’s product at various prices during a specified future period of time. From the planning requirements, a business firm needs demand forecast for different time spans. Accordingly, there are two main types of demand forecasts: the short-term and the long-term.

Short-term demand forecasting is defined as the process of finding out the likely demand for a firm’s product at various prices during a short period of time, say, not exceeding a year. It relates to policies regarding sales, purchase, price and finances.

This is required for current production scheduling, purchases of raw materials and inventory of stocks, etc. Short term forecasting is essential for formatting a suitable price policy.

The seasonality of sales and its impact on production planning, stocks, distribution of products in markets etc, will be taken care of by the short-term demand forecasting. If the business people expect a rise in the prices of raw materials or shortages, they may buy early.
Short-term demand forecasting