End-of-Year Sales Forecasts
Know at any time the potential value of your sales at the end of the year.
ℹ️ The term "forecasting" is used in the case of chronological data and the term "prediction" in the case of data relating to a specified time period.
Predicting your sales will allow you to meet demand better, manage your stock or production capacity more accurately. Good forecasts can also serve your business policy: what is the impact if we increase our prices? What would be the impact of signing a customer today?
Predicting has become of crucial importance in our decision-making processes. Ideally, every business leader should have a forecaster to help them anticipate the course of events and take corrective action before problems arise.
The first question then arises, "Which method to choose? If the question is simple, the answer is generally very disappointing, even paralyzing. There is no better forecasting method than the others. Worse, they can all be correct in different cases.
kopilot predicts the probable volume of sales. It is not concerned with the eventuality or the occurrence of a specific event, nor with the expiry of a particular event.
kopilot offers a panel of prediction methods to provide a single prediction and a confidence index that better understand the different scenarios.
The prediction changes daily, and even intra-day, as business events occur.
Let's imagine you do the same as Last Year for the remaining time till the end of the year.
- kopilot takes your sales from the beginning of the year to today.
- From tomorrow, kopilot adds your last year's sales until the end of the year
This method is based on the assumption that the current growth rate will be maintained until the end of the year. Let's take the year-to-date growth rate into account to compute the sales for the non elapsed time.
- Sales are recorded from the beginning of the year to today.
- kopilot computes your year-to-date growth rate compared to last year.
- From tomorrow, kopilot multiplies last year's sales by the growth rate until the end of the year
Let's project the sales trend till the end of the year. This method is based on the monthly income of the previous 24 months. In other words, it will only be displayed if kopilot has sufficient time depth.
- The current month's revenue is replaced by the average income of the previous 24 months.
- Next month income is replaced by the average sales of the previous 23 months, plus the simulated sales for the current month.
- And so on until the end of the year.
Let's use some statistical modeling. The regression model seeks to establish a linear relationship between a variable, called explained (here the time), and one other variable called explanatory (sales). This method is based on the last 36 months of sales. In other words, it will only be displayed if kopilot has sufficient time depth.