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How does quantitative sales forecasting compare to qualitative sales forecasting?

Advantages of quantitative forecasting:

-Numerical so easy to interpret and easy to analyse for example graphs can be made.

-Data can be objectively interpreted and bias is often not an issue.

Disadvantages of quantitative forecasting:

-May lack detail.

-Correlations do not show cause and effect, so may be hard to determine this.

-Extrapolation may be reductionist – just because there has been a 5% increase in sales over the last few years, doesn’t mean this will continue. Many external factors.

Advantages of qualitative forecasting:

-Detail rich; lots of information to work with.

-Open and unrestricted – for example brain storming discussions can allow for innovation.

Disadvantages of qualitative forecasting:

-May be issues of subjectivity in interpreting consumers’ answers.

-Consumers may feel coerced into giving answers that the business wants to hear, so may lack validity (e.g. in test market, they may not like a product as much as they say).

Peter C. GCSE Business Studies tutor, A Level Business Studies tutor,...

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