Case: AG Refrigerators Ltd.

Division : A
Group No : 1
Abhimanyu Rai Bhagi
Deepanshu Gupta
Rahul Kumar
Sonakshi Vij
Budget Forecast 2006-07: 8,80,000

Short-Comings
Moving Averages How can improve
Method accuracy of existing
Good for short term sales forecast
forecast
Works Well under
stable market
Historical data required
Existing
Objective
Method
Analysis: AG Refrigerators

Forecasting : Process of making statements about events whose actual outcomes have not yet been
observed.

A sales forecast is an essential tool for managing a business of any size.

Sales Forecasting Method

Quantitative Qualitative

Our analysis is that companies use two or three forecasting methods to ensure high level of accuracy and to
gain confidence.
Factors to consider while selecting a forecasting technique

Degree of
Accuracy

Time horizon
that the sales Position of
forecast is
intended to
factors products in
its life cycle
cover

Availability
of data and
information
AG Refrigerators requirements
Forecasting should be made in link with market segments (share of households,
Institutional customers
Product type( frost free, direct cool)
Product size( 55 liters to 310 liters)

Bottom up/
Bottom up/ Build
build up approach
up approach
This approach starts with the companys area or branch managers asking its
salespersons to estimate or forecast the sales in their respective territories
Sales person are given guidance by their respective area / branch sales
managers on how to get information from the existing and potential customers on
the estimated purchase of the companys products and services for the specified
future time period
Suggestion :
Moving averages method
Sales force composite method
Forecasting technique

Method Time required Cost Accuracy Application Strengths Weaknesses

to develop

Sales force Medium to Medium Fair to good (if Annual sales Break down Less
composite Long trained) forecast ,for possible, knowledge,
method existing and involvement of optimistic or
new products) sales people pessimistic
estimates

Moving Short (hours) Low Good for short Short and Simple and Cannot predict
Averages term and medium term easy to downturn /
method stable sales and calculate upturn.
conditions inventory Historical data
is needed.
Forecasting Aspects
Market Segments
Develop an exhaustive customer profile to understand their characteristics
Understand what are major fridge categories that drives the sales and what
motivates customer purchase

Competitive Environment
Any new Entrants in the Industry that can disrupt like Jio in Telecom
E-commerce discount spree that could wilt our sales

Government Policy Changes

Any Government policy changes that are expected to disrupt our sales like Star
ratings or GST implementation

Sales Export/Import Dependent

If majority of our sales Export dependent, then any changes in global trade rules
that can disrupt like Trump in US
If majority of our sales within country any customer behavior change that can disrupt
like Underground refrigerators that work on solar power
 Sales Forecast: Sales Budget:

How much we'd like to pull in during a
given period of time, usually prepared
on a yearly basis. Sales Budget is the number
you really hope to get from sales. This is
where you *want* to go - your ultimate sales
goal
How much we think we'll actually pull in
during a given period of time, usually
prepared on a monthly or quarterly
basis. Sales Forecast is how you're
actually tracking on that number - will
you make your budget goal?

.
What Should be higher?

Ideally they should not differ, as it shows

our forecasting ability and ability to
execute the established goals
 Thank You