Can You Discuss The Approaches To Sales Forecasting With Suitable Examples?

There are mainly 2 approaches to sales forecasting:

1. First one is quantitative and
2. Second one is qualitative, or judgmental.

(Sometimes companies use both methods)

Quantitative technique

Quantitative technique deals with numbers to do forecasts. These numbers are placed in a formula to forecast the company's sales. Like the total sales and expenditure, company's cash inflows and cash outflows. It is calculated from figures like sales volume, gross national product, disposable income, and total number of buyers in the market.

Qualitative technique

Qualitative, or judgmental, forecasting doesn't depend on numbers or figures to do estimate sales. It depends upon the intangible factors. This method is normally used for new business where historic data is not present or when you the market is in initial phase. The companies  normally forecast the professionals in the field, the sales force and the consumers.