Sales forecasting is a quantitative technique used to predict a firm’s level of sales revenue over a given time period, such as per month, quarter, or year. Businesses are keen to understand the latest and expected market trends in the industry and the underlying reasons for these developments.

Sales forecasting is a business management tool that can be used to help all aspects of an organization’s operations, so long as the forecasts are carried out with a high degree of accuracy.

The (single) learning outcome (or assessment objective) for this section of the IB Business Management syllabus is:

• The benefits and limitations of sales forecasting (AO3)

 Teacher only box

Note to teachers

Please note the following learning outcome from the previous syllabus (final exams N23) no longer features in the new guide (first exams 2024):

• Up to four-part moving average, sales trends and forecast (including seasonal, cyclical and random variation) using given data (AO4)

Therefore, there is no need to teach students how to calculate 3-part and 4-part moving averages.

This topic also works well with the following components of the Business Management Toolkit (BMT):

• BMT 7 - Descriptive Statistics, and

• BMT 15 - Simple linear regression (HL)

Please be aware of the above points if/when using resources for the previous syllabus, such as past IB examination papers and mark schemes.