(Get Answer)

Weighted Moving Average Method Forecasting Example Paper
Question
How to use Weighted Moving Average to forccast the futurc? Plcase give an example to illustrate the equation and the meanings.

Expert Answer

This solution was written by a subject matter expert. It's designed to help students like you learn core concepts. Weighted Moving Average Method Forecasting Example Paper

ORDER YOUR PAPER NOW

Step-by-step

1st step
All steps
Answer only

Step 1/2

If you want happy customers and cash in your account, you need to get familiar with weighted average forecasting.

Similar to a weighted grade in your college English class, the weighted average formula is placing more

Expert Answer

Weighted Moving Average Method Forecasting Example Paper

Question

How to use Weighted Moving Average to forccast the futurc? Plcase give an example to illustrate the equation and the meanings.

Expert Answer

ORDER YOUR PAPER NOW

Step-by-step

1st step

All steps

Answer only

Step 1/2

If you want happy customers and cash in your account, you need to get familiar with weighted average forecasting.

Similar to a weighted grade in your college English class, the weighted average formula is placing more "weight" on certain months and then averaging the usage with those weights taken into consideration.

Weighted Average Forecasting is a method that determines how much inventory to keep on hand based on an item's past performance and an assigned "weight" or emphasis. The formula works well for items that regularly sell, with sales in at least 8 of the prior 12 periods. For products with regular, recurring usage, demand will likely increase or decrease in the same months year after year, giving demand planners a good idea of what they'll need on hand.

Step 2/2

Calculating the value of a weighted sales pipeline is straightforward. Multiply the value of each deal by the probability of closing to get a forecasted value. And sum up the forecasted values to get a weighted value of the overall pipeline.

For example, here’s the weighted revenue formula if you’ve got three deals in the sales pipeline.

Forecasted Revenue 1 = Deal 1 Value x Probability of Closing

Forecasted Revenue 2 = Deal 2 Value x Probability of Closing

Forecasted Revenue 3 = Deal 3 Value x Probability of Closing

Weighted Revenue = Forecasted Revenue 1 + Forecasted Revenue 2 + Forecasted Revenue 3

You need to assign higher weights to proposals more likely to close in the weighted sales pipeline report.

But how do you assess which deal is more likely to close?

You can rely on the sales stages. How many sales stages has a lead passed through? The further a deal is in your pipeline, the more likely it’ll result in you closing the deal.

For instance, you can assign a 50% chance of deal closing if a deal is at stage four in your eight-stage sales process. Similarly, stage five will have a 63% chance.

But not all sales stages are equal. The difference between the prospecting stage and lead qualification stage is much smaller than the one between the lead qualification stage and the trial stage.

That’s why you need to define your own weights for each stage, depending on your sales data.

For example, say your CRM sales pipeline has the following deal stages: Weighted Moving Average Method Forecasting Example Paper

ORDER YOUR PAPER NOW

Prospecting
Lead qualification
Trial
Proposal
Negotiations
Closed Won
Lost opportunity

Based on your data, you can assign the following percentages to each stage:

Prospecting: 10%
Lead qualification: 25%
Trial: 50%
Proposal: 60%
Negotiations: 75%
Closed Won: 100%
Lost opportunity: 0%

Let’s find out how these weights affect your sales pipeline revenue.

Assume you have the deals in five different sales pipeline stages: Weighted Moving Average Method Forecasting Example Paper

Deal Set 1: Prospecting — $100,000
Deal Set 2: Lead qualification — $50,000
Deal Set 3: Trial — $150,000
Deal Set 4: Proposal — $80,000
Deal Set 5: Negotiations — $60,000

Let’s plug these values into the weighted revenue formula:

Forecasted Revenue 1 = $100,000 x 10% = $10,000

Forecasted Revenue 2 = $50,000 x 25% = $12,500

Forecasted Revenue 3 = $150,000 x 50% = $75,000

Forecasted Revenue 4 = $80,000 x 60% = $48,000

Forecasted Revenue 5 = $60,000 x 75% = $45,000

Weighted Revenue = $10,000 + $12,500 + $75,000 + $48,000 + $45,000 = $190,500

This means you can assume your sales team will make almost $175,500 in the near future.

You can also look at weighted revenue on a monthly or quarterly by going into your CRM and filtering the data by the expected close date.

For instance, say you filtered the data in the above example by quarter and got the following: Weighted Moving Average Method Forecasting Example Paper

ORDER NOW

Prospecting — $30,000
Lead qualification — $10,000
Trial — $50,000
Proposal — $20,000
Negotiations — $5,000

You can plug these values into the formula to get the quarterly estimated revenue:

Quarterly Weighted Revenue = ($30,000 x 10%) + ($10,000 x 25%) + ($50,000 x 50%) + ($20,000 x 60%) + ($5,000 x 75%) = $46,250

Final answer

Please refer above steps for detailed explained answer for above question and ask for doubt Weighted Moving Average Method Forecasting Example Paper

This question has already been tackled by one of our writers and a good grade recorded. You can equally get high grades by simply making your order for this or any other school assignment that you may have.

Every Student Buys Essays from us, here is why!

Pressed for time to complete assignments or when you feel like you cannot write, you can purchase an essay on our website. Some students also want model papers to use as samples when revising or writing. There are also students who approach our essay writing service to beat deadlines. We handle every type of homework, assignment, and academic writing tasks. You can buy college essays and other assignments here. At a glance, here are some reasons students prefer our website.

100% Original Essays and Papers

You can be sure that you are getting a paper that is custom written based on your instructions. We do not sell papers that are pre-written. Instead, we write every essay from scratch. When you say “write my essay,” we respond by giving you a paper that is 100% original and free of any plagiarism. The essays you purchase from us have never been sold anywhere.

Flexible & Affordable Prices

It does not cost a fortune to get academic writing help on our website. If you have a question from class, place an order, get a discount, and get cheap essay writing services. What you see as the price is what you pay for. There are no any hidden charges. If you need urgent papers, they might cost a little more, but the price is worth the quality you get in the end. Hire a professional academic writer beginning from $13 a page.

Anonymity, Privacy, and Confidentiality

No one will ever know that you purchased an essay or assignment from our website. The essays you buy from us are written by experts. Your data is only used to coordinate the essay writing services you get. No one can access your personal information and data. Go ahead and order an essay from our website. It is safe, secure, and convenient.

Order a Unique Copy of this Assignment

Topic

Type of Paper

Pages

275 Words

By placing an order you agree to our terms of service

Place Order »