Definition of Sales Forecasting

Forecasting means making predictions. In the words of Garfield,

“Production is an integral part of any scientific generalization as to
the relationship between two or more factors; if properly established,
the generalization must hold not only with regard to observations
made in the past but also in all future observations in the same
phenomena. Production is evermore organically related to those
generalization which establish a definite time sequence in the
occurrence of certain factors.”

Sales forecasting connotes forecasting of sales of the total volume or

value of goods sold. It is an estimate of the level of demand to be
expected either in the from of the total volume or the value or goods
sold for a product or several products for some period of time in the
future. According to American Marketing Association, “Sales forecast
is an estimate of sales in dollars or physical units for a specified future
period under a proposed marketing plan or programme and under an
assumed set of economic and other forces outside the unit for which
the forecast is made.” Sales forecasting is therefore basically guess
based on past data, present circumstances and future prospects. To
make a forecast most meaningful, it should be in terms of the units to
be planned or scheduled, and it should cover a time period atleast as
long as the period of time required to make a decision into effect.