Sales and Distribution Management

AG REFRIGERATORS LTD.

DEVELOPING SALES FORECAST

Presented by, Aashish Jain

Sai Gowtham
Param Agarwal Anirudh Krishna Prasad

CASE BRIEF
Companys

sales forecast for the year 2006-07 will be 8,80,000 refrigerators. Information required for the sales budget:
Market segments Product type Sizes.

QUESTION - 1
What do you suggest to improve the accuracy of the sales forecast and to get the break-up of the sales forecast into product types and sizes, and market segments.

Assuming that the environmental conditions are similar as the previous year, moving averages method will be suitable for the forecast. However if the conditions are not stable and uniform in the previous years, decomposition method can be employed to know the pattern of the sales in particular conditions, so that they can plan the production accordingly and hence the sales budget. If there is a particular special condition dominant in the past few years, regression analysis can be done to find out the market response for that independent event.

QUESTION 2

Should the companys sales budget be lower, higher, or equal to the sales forecast and why? The companys sales budget should be set lower than the sales forecast or sometimes equal to the forecast, since budget cannot be greater than what is forecasted.