Selection of Sales Forecasting Technique using a Tool of Zero-One Integer Goal Programming

Author: Nishant Kumar*, Saurabh Gupta

Abstract:
Sales forecasting is one of the most crucial inputs to a firm?s decision making process. The achievement of the organizational goal depends upon the selected sales forecasting techniques that will give the necessary information to pursue these goals. Since the sales forecast is crucial to a firm?s success it is important that the right technique is selected to generate forecasts. Because of the importance of technique selection the overall purpose of this study is to propose and demonstrate a methodology for improving the sales forecasting technique selection process by using a tool of zero-one integer goal programming. Methodology: The methodology of zero-one integer goal programming is used to suggest which sales forecasting technique should be used for given sales forecasting situation. The possible way of setting up the goal program is to use the evaluation criteria as goals to achieve. In order to test the significance of goal programming approach a comparison is made between the protocol results and predicted results by using the percentage estimates of rank order of techniques. Practical Implications: The use of goal programming formulation provides a formal, logical way of thinking about decision making process. This should increase the understanding of this problem area and increase the quality of decisions. Since goal programming is an optimization technique it gives a more normative approach to decision-making and emphasizes such activities as sensitivity analysis and measurement.

Keywords:Sales Forecasting Techniques, Goal Programming, Evaluation Criteria

DOI:

International Journal of Trade & Commerce (Vol: 2 Issue:2)