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Estimating revenue
PUTTING AN IDEA INTO
PRACTICE
Specification detail
How businesses forecast sales volumes
and selling prices to estimate revenue
Estimating RevenueKeywords to learn and remember
Sales Forecasts: Estimates of the future level of sales
Sales Revenue: The total value of sales made within a period.(Value = Price X Quantity Sold)
Sales revenue:Brentford Football
ClubTicket Sales
Sponsorships
Car parking
Food and Drink
ProgrammesRaffle tickets
Transfers
Sales of Brentford kit
In your book list the various forms of revenue for
Kingston Lodge
Blueberries and ice-cream
What will happen to sales on a hot sunny day?
What will happen to sales on a cold wet day?
Pg 90
Sales forecast : Quantity
Sales forecast : Quantity
Hersham Butchers
What will happen to sales in Summer?
What will happen to sales in Winter?
Forecasting Sales volumes : Quantity
Some produces have elastic sales – The volume sold changes oftenSuch as : CDs, Rubber Boots and Gym Memberships
Some products have inelastic sales – The volume sold doesn’t change as oftenSuch as :Coffee, oil, bread, milk
Estimating Price (involving costs)
Prices cannot be estimated with FULL confidence.
In 2008 BP assumed prices would average £1.00, when they averages £1.15In March, 2008 Coffee farmers estimated they would receive 60p per pound for the year yet 3 months later received 50p.
Can you think of reasons why Prices may change?
Estimating QuantityUnlike Price, Quantity can be estimated with much more confidence.
When Robbie Williams tours they can expect the tickets to sell out, so it is usually safe to assume you will sell the same amount next time. Even Heinz have records that show ketchup sales, including seasonal peaks and troughs
Plenary : Estimating Price + Quantity
Using a restaurant think of reasons how Quantity may change?Using a restaurant think of reasons how price may change?
Why is it important to estimate revenue?
What will can you do with this information?