on 11-20-2009 9:43 AM
Hello Friends
What is the difference between sales forecast and demand forecast ?
Regards
RK
Rakesh,
Expanding on Senthil's comments, sales forecast is usually a high level forecast or expectation of revenue. In other words, what is the expected level of revenue for your organisation within the time frame in question. Statements like, "we expect to grow 3% per year for the next three years" is typically a sales forecast. Another important point is that it may or may not be based on extensive market analysis. Sometimes is just a condition on a broader business plan and as such is Top-Down.
Demand forecast, is based on waht the market is expected to buy from you, your competitiors and other potential replacement products. It is based on market analysis and initially is done independently from the sales forecast (bottom-up). ON subsequent interactions within the management team, the demand forecast will provide the argumentation, SWOT analysis and so on to establish the necessary strategies to realise the sales forecast.
On an ideal scenario, both start on their own but converge throughout the process of setting the mid-long term strategy for the business.
I hope this adds more colour to your request.
Please let us know if this is what you're after.
Cheers,
Rodrigo
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Rakesh,
Expanding on Senthil's comments, sales forecast is usually a high level forecast or expectation of revenue. In other words, what is the expected level of revenue for your organisation within the time frame in question. Statements like, "we expect to grow 3% per year for the next three years" is typically a sales forecast. Another important point is that it may or may not be based on extensive market analysis. Sometimes is just a condition on a broader business plan and as such is Top-Down.
Demand forecast, is based on waht the market is expected to buy from you, your competitiors and other potential replacement products. It is based on market analysis and initially is done independently from the sales forecast (bottom-up). ON subsequent interactions within the management team, the demand forecast will provide the argumentation, SWOT analysis and so on to establish the necessary strategies to realise the sales forecast.
On an ideal scenario, both start on their own but converge throughout the process of setting the mid-long term strategy for the business.
I hope this adds more colour to your request.
Please let us know if this is what you're after.
Cheers,
Rodrigo
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Hi! rakesh,
There is no diffrence between Sales forecast & demand forecast .
Forecast is nothing but forecasted future sales.
In an organisation the use of DP is only to forecast how much will be future sales which is the base on which all procurement & production planning happens.
Regards
Vaibhav Sareen
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Hi Rakesh,
Sales forecast is the forecast actually made by the sales based
on the company's current position based on its budget, current
financial situation, current profit margin etc., which will be
decided by sales team and sales team management personnel
which will be fixed and forecast will be made accordingly
Demand forecast is the forecast that is actually needed by
the customer or by market. ie It will reflect the actual
demand situation in the market.
Both sales forecast and demand forecast may or may not be
same for a typical condition. In general, sales forecast can
be adjusted to reduce or exceed the demand forecast based
on the performance of the company.
Hope it is clear now.
Regards
R. Senthil Mareeswaran.
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