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Sales Forecast

  1. #1
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    Sales Forecast

    Good evening everybody,

    I need to make a graph where I have actual data from sales and would like to have an additional curve with predicted sales for the future. I know then I can do this with the forecast funktion or the formula from the trendline but those to are linear function. Whereas I can already see that the actual sales already have an concave curve.

    Is there any way I can predict the sales better ?

    Thank you very much and best regards

    Daniel

  2. #2
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    Re: Sales Forecast

    I would suggest that this is more of a math question than an Excel question. Yes you can predict sales using any number of functions. The hardest part is trying to decide what kind of function to use.

    1) For a purely empirical approach, you can use a polynomial (via the LINEST() function or the chart trendline feature).
    2) Perhaps there is seasonality or periodicity that needs to be taken into consideration. There are various ways to do this, perhaps some as simple as using a trigonemetric sin() or cos() function. These are usually non-linear regressions, but they can still be done using the Solver utility.
    3) Perhaps you prefer an exponenential or logarithmic function. These, too, can be regressed using the LINEST() function.

    It really depends on what kind of trend you expect to see. I'm not sure that we on this side of the internet are really in a position to make this kind of judgement. Once you decide what kind of function you want to try, I'm sure we can help you program that regression into Excel.
    Quote Originally Posted by shg
    Mathematics is the native language of the natural world. Just trying to become literate.

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    Re: Sales Forecast

    Thanks MrShorty for the great explanation. Unfortunately I don't have any idea which way would be the best :/

    Maybe if i show you the data you can help me to choose the right way to calculate ?

    Datum Sales
    9/16/2015 879
    9/17/2015 2593
    9/18/2015 4025
    9/19/2015 5328
    9/20/2015 7140
    9/21/2015 8545
    9/22/2015 10250
    9/23/2015 11916
    9/24/2015 13395
    9/25/2015 14519
    9/26/2015 15618
    9/27/2015 17085
    9/28/2015 18467
    9/29/2015 19757
    9/30/2015 21091
    10/1/2015 22227
    10/2/2015 23110
    10/3/2015 24165
    10/4/2015 25429
    10/5/2015 26540
    10/6/2015 27571
    10/7/2015 28611
    10/8/2015 29579
    10/9/2015 30313
    10/10/2015 31147
    10/11/2015 32366
    10/12/2015 33487
    10/13/2015 34487
    10/14/2015 35452
    10/15/2015 36323
    10/16/2015 37010
    10/17/2015 37695

  4. #4
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    Re: Sales Forecast

    If you don't have any metric, maybe look into the Forecast function.

    http://www.excelfunctions.net/Excel-...-Function.html
    Attached Files Attached Files

  5. #5
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    Re: Sales Forecast

    Not really. About the only thing that really changes is that I don't think and exponential type trendline is likely, but the other choices are still equally valid. Without more information, I'm not sure there is much more than can be said.

    I might be tempted to do something with a straight line regression (y=m*t+b), with the explanation that this forecast looks like it would overpredict future sales and leave it at that.
    If I only need a short term forecast (depending on how I want to define short term), I might be tempted to use a 2nd order polynomial. Knowing that this will predict a maximum in sales and then decreasing sales from there on, I do not know how far out I would like to use this kind of forecast.

    Edit: A note on JieJenn's FORECAST() solution: the FORECAST() function uses a simple straight line regression (y=mx+b). You will still need to decide whether that is the kind of equation you want to use for the forecast.
    Last edited by MrShorty; 10-22-2015 at 01:16 PM.

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