<4.3 SALES FORECASTING (HL)>

--ACTIVITY--

Forecasting your own grades

As a student following the IB diploma you will study six subjects. You might be wondering what your Diploma score will be at end of the course.

In pairs or in a group, discuss the following questions:

1 What factors do you consider when you are forecasting your IB grades?

2 How is forecasting your IB grades useful to you and your school?

3 What are the difficulties of forecasting your IB grades?

--INTRODUCTION--

It is impossible to predict the future with complete certainty, but most businesses will attempt to forecast future sales – if only for short periods of time in the future. There are several methods of sales forecasting.

--BENEFITS (APPLIED TO TESLA)--

--TASK--

Directly apply the 'Benefits of accurate sales forecasting' to the benefits of TES accurately knowing the number of students who will be attending in the next 5 years.
"Accurately forecasting student numbers for the next 5 years is very beneficial to TES. Firstly, it helps the operations department know how much materials such as stationary, paper, classroom furniture, laptops etc.....,"

--TASK--

Explain how each of the 'Limitations of accurate sales forecasting' could occur for TES impacting the accuracy of their forecasts for student numbers over the next 5 years.
"Accurately forecasting student numbers for the next 5 years is very difficult and there are numerous factors that can limit their accuracy such as the rapid development and adoption of alternative technology such as...."

Do you think it would be useful if TES knew how many students would be attending next year? Why? Do you think it would be silly to predict numbers for a decade from now? Why? Use the factors above to explain 3 benefits of such forecasting and 3 limitations if the school was to simply rely on these forecasts?

MM uses just-in-time (JIT) production in its Oil Production Division. The long-term demand for oil is usually predictable, and production is reliable unless major problems occur. In 2020, however, there was an unexpected decrease in demand for oil. Uncertainties in the world economy and responses to climate change now make predictions more difficult.
MM has prepared a sales forecast for its oil production for 2022 and 2023 (Table 2).
With reference to Table 2, explain one benefit and one limitation for MM of using sales forecasting. [4]
- - - - Award [1] for one benefit or one limitation, up to a total of [2].
      - Award [1] for putting each benefit/limitation into context, i.e., reference MM/ Table 2 up to a total of [2]. i.e
      - Award [3] for answers that put a benefit and/or limitation into context but does not make use of Table 2 in relation to sales forecasting for MM.
      - Only award [4] for answers that make explicit use of Table 2 in relation to sales forecasting for MM.

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