Exam 14: Estimating Potentials and Forecasting Sales

The sales force composite method is especially popular with consumer goods firms because optimistic and conservative forecasts balance out due to the large number of customers.

Actual sales are normally equal to potential figures.

Potentials are the minimum possible sales for all sellers of goods or services.

Sales forecasts for new products may be based on any of the following procedures except:

Taking the average volume achieved in several recent periods and using this data as a prediction of sales in the next period is synonymous with which forecasting technique:

Traditional Drug Company is the sole manufacturer of a frequently-prescribed antidepressant drug which is sold over the counter in drug stores. For their Midwestern sales region; Effective Buying Income = .569% Total Retail Sales = .728% Total Population = .582% What is the Midwestern Buying Power Index?

Time series projections cannot be improved by making adjustments to eliminate seasonal effects.

Pat Murphy is working on a special project for the marketing manager of the Television Land Company. The marketing manager asked Pat to determine the unit potential demand for color television sets in Indianapolis. All the data Pat was given is provided below. What is the correct unit potential demand that pat should have calculated? (Within errors of rounding) Given: Per capital expenditures on TV sets per year = 180 Average price = $500 Population of Indianapolis = 1,000,000 Proportion spent on TV sets = .40 Proportion spent on black and white sets = .35 Proportion spent on color TV sets = .65

Although many firms use seasonal adjustments, they do not significantly reduce forecasting errors.

At least three periods of data are needed for a moving average.

The key step in deriving linear regression equations is finding values for the coefficients (a, b) that give the line that best fits the data.

The actual sales levels achieved in any period are determined by which of the following?

In using __________, the analyst estimates trends from past data and adds this figure to current sales to obtain a forecast.

The subjective sales forecasting method that firms use most regularly is:

The naïve approach is the simplest quantitative forecasting technique.

Which of the following is/are important to consider in selecting a forecasting technique?

Which of the following is/are true regarding seasonal adjustments?

A smoothing constant of .8 in exponential smoothing gives a fairly low weight (20 percent) to current sales.

Potential sales are the predictions of the actual volume that is expected in the future time period.

Business market potentials can be computed from data made available through the U.S. Census of Manufacturers.