One of the methods of estimating future sales of a product or service. Here sales forecasts are developed on the basis of past sales. There are three ways of estimating sales under this method.
These are:
(1) Time-series analysis, which consists of breaking down past time series into four components (trends, cycle, seasonal, and
erratic) and projecting these components into the future.
(2) Exponential smoothing, which consists of projecting the next period’s sales by combining an average of past sales and the most recent sales, giving more weight to the latter.
(3) Statistical demand analysis, which consists of measuring the impact of each of a set of causal factors (e.g., income, marketing expenditures, price) on the sales level.
(4)Econometric analysis, which consists of building set of equations that
describe a system, and proceeding to fit the parameters statistically
