How to forecast next month sales given current month revenue / volume data?
I have an entire month's worth of revenue and volume data. I can sort all of the data daily by product and channel (online vs. retail). What's the best way to use this to forecast subsequent month data? I feel like applying a standard m-m growth % is not the most effective way. Should I be looking at current month's week-over-week revenue and volume growth and apply similarly for future month?
I feel like it's simple, but I'm confusing myself over the complexity of how to do it.
Could you provide the following 2 pieces of info:
Industry
Which Month you have and which month you are trying to forecast
I'm only asking this because the one thing I would worry about is some cyclical/seasonal pattern to the revenue depending on the industry/month (example trying to use retail December sales to forecast retail January)
Industry: retail.
January sales provided -> required to forecast for February. For Jan, there are daily sales data provided with product launches, pricing changes, etc. throughout the month. The prompt is to use that data (and not to assume any other additional changes besides those factors) to forecast next month's sales.
If it’s retail industry I’d use traffic as a driver with a seasonality component. Traffic X some conversion factor to get transactions and then that times the average transaction to get your revenue. Build in assumptions around covid and openings and include a shift in penetration back to brick and mortar as things open up.
Happy to help via PM if you need it.
PM'ed you for more insights.
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