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Muhammad Shariq 2171019 Quiz No 2

An organization would not need forecasts if it had strong business research and data analysis capabilities to accurately predict outcomes. When starting a new business or seeking funding, venture capitalists will require a business plan with forecasted financial information like a profit and loss statement. There are two ways to manage a poor forecast: managing biases by acknowledging biases in forecasts, and improving bad or inaccurate data used in forecasts. Omar turning in an optimistic sales forecast has pros of motivating him to work hard to keep his job, but cons of the forecast being inaccurate which could still lead to him losing his position.

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Shariq Qureshi
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893 views2 pages

Muhammad Shariq 2171019 Quiz No 2

An organization would not need forecasts if it had strong business research and data analysis capabilities to accurately predict outcomes. When starting a new business or seeking funding, venture capitalists will require a business plan with forecasted financial information like a profit and loss statement. There are two ways to manage a poor forecast: managing biases by acknowledging biases in forecasts, and improving bad or inaccurate data used in forecasts. Omar turning in an optimistic sales forecast has pros of motivating him to work hard to keep his job, but cons of the forecast being inaccurate which could still lead to him losing his position.

Uploaded by

Shariq Qureshi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Muhammad Shariq

2171019

Quiz no 2

QUESTION NO 1
What capability would an organization have to have to not need forecasts?

ANS:
An organization would essentially require business research and data collection as well as data
clarification abilities to forecast accurately.

QUESTION NO 2
When a new business is started, or a patent idea needs funding, venture capitalists or
investment bankers will want to see a business plan that includes forecast information
related to a profit and loss statement. What type of forecasting information do you
suppose would be required?

ANS:

Various types of Business Forecasting are Capital Forecast

Every business creativity will have to think of its financial plans. It should be determined to meet

the needs of the company. With this object in view, forecasting of capital requirements has

become a necessity is taken as a primary step in the organization. In every business concern, the

capital is required not only to meet fixed and working capital but also for reduction, replacement,

development, reorganization, etc. Accurate forecasting helps the organization to employ its

capital to the fullest extent to get the optimum returns on its investment.
QUESTION NO 3
Discuss how you would manage a poor forecast.

ANS:
There are 2 tips to manage poor forecasts:

Managing Biases
Commonly acknowledged that part of the problem when it comes to forecasting accuracy is
individual bias from everyone involved in the process. The bias could be optimistic, so each
forecast is above what’s realistically achievable, or could be pessimistic and low ball their final
forecasting. Whatever the case may be, it still comes down to the same thing—individual bias

Improve Bad Data and Data Input


According to Ventana Research, industry data shows that most sales representatives spend four
hours per week manually entering data into the CRM, with only about 40 percent accuracy. If the
data used to create the forecast is inaccurate, then logically follows that the forecasting goes to
be wrong. Accurate sales data is one of the most components of a reliable sales forecast.

QUESTION NO 4

Omar has heard from some of his customers that they will probably cut back on order
sizes in the next quarter. The company he works for has been reducing its sales force due
to falling demand and he worries that he could be next if his sales begin to fall off.
Believing that he may be able to convince his customers not to cut back on orders, he
turns in an optimistic forecast of his next quarter sales to his manager. What are the
pros and cons of doing that?

ANS:

Omar will have the motivation to work hard, invest more time and effort in persuading customers
to do not cut the order sizes for optimum performance. Therefore, in this way, Omar can not only
save his position but also may receive the reward by increasing the customer’s orders .He may
take time in developing his sales strategies to convince the customer and may discharge from the
company

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