Teaching notes. Sales forecasting in fast-moving consumer goods
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1 Sales forecasting: Teaching notes Teaching notes Sales forecasting in fast-moving consumer goods OVERVIEW SUGGESTED TIME Students will be asked to conduct some market research into a supermarket chain or statistics relating to the whole industry, and to perform some market analysis via extrapolation techniques. The aim of this activity is to consolidate theoretical studies with a practical application. This activity will: provide students with opportunities to generate key skills evidence in C3.1a, C3.3, N2.1, N2.2 and N2.3. Appropriate use of IT could generate evidence for IT2.1, IT2.2 and IT2.3. The research activity should take 2 hours. The further activities should, together, take another 2 hours. Alternatively, you can provide your own ready-researched material. PREPARATION Photocopy a set of the Student notes and resources for each student (and a set of your own research material if appropriate). EQUIPMENT Students will require calculators, drawing/charting materials and access to appropriate research sources. Internet access will also be required (most of the large supermarkets now have websites where their figures can be readily accessed), as will the relevant company reports and Mintel reports or articles in publications such as Retail News. Figures from any of the major four supermarket operators should provide a suitable basis for comparison. METHOD Familiarise yourself with the learning activity. Distribute a set of the Student notes and resources to each student. Go through the Student notes with the class so that each student understands the structure of the activity and the work required. Discuss with the whole group ways in which they could conduct the research. Set a deadline for completion. Ask the students to conduct the research independently. Ask the students to complete the further activity steps (refer to the guide times in the Student notes). i
2 Sales forecasting: Teaching notes Key skills in A-level Business Studies KEY SKILLS Students will need to: FOCUS keep notes to use in the discussion keep a record of how they decided where/how to collect the data required and how they obtained the information record all calculations, consistently and accurately, clearly showing workings, checks and results present their findings appropriately and record their interpretation of the results. Students have the opportunity to generate the following key skills evidence: Communication C3.1a Contribute to a group discussion about a complex subject. C3.3 Write two different types of documents about complex subjects. One piece of writing should be an extended document and include at least one image. Evidence must show the student can: make clear and relevant contributions in a way that suits their purpose and situation; listen and respond sensitively to others and develop points and ideas; and create opportunities for others to contribute when appropriate. select and use a form and style of writing that is appropriate to the purpose and complex subject matter; organise relevant information clearly and coherently, using specialist vocabulary when appropriate; and ensure that text is legible and spelling, punctuation and grammar are accurate, so that their meaning is clear. Guidance for assessors The evidence must show that you have given feedback, showing how the assessment criteria have been met. Witness statements, if used, must be signed off as valid by an assessor. Audio or video clips, if used, should be brief and to the point, identifying sections of tape where the assessment criteria are met. The type of document must be identified. (Likely to be extended and include the use of at least one image.) the subject matter is complex the candidate has selected an appropriate form and style for the subject and purpose the candidate has used specialist vocabulary as appropriate there are no more than one or two errors in the text images are used to aid understanding of the written text documents produced using IT are accurate and authenticated by the assessor (ie signed and dated). ii
3 Sales forecasting: Teaching notes Application of Number N2.1 Interpret information from two different sources including material containing a graph. N2.2 Carry out calculations to do with: a amounts and sizes b scales and proportion c handling statistics d using formulae. Evidence must show the student can: Plan and carry through at least one substantial activity that includes tasks for N2.1, N2.2 and N2.3. choose how to obtain the information needed to meet the purpose of their activity; obtain the relevant information; and select appropriate methods to get the results they need. carry out calculations clearly showing their methods and levels of accuracy; and check methods to identify and correct any errors, and make sure their results make sense. Guidance for assessors ONE source the purpose is clearly stated the sources are identified the relevant information is included. At least one of the sources must contain a graph. (This might be covered in this activity.) types of calculations are identified (Types b, c and d are likely to be covered and possibly a.) statistical work involves working with data sets containing at least 20 items, and making comparisons. (Likely to be covered in this activity.) when assessing the student s work, you indicate any errors they have made the methods and the level of accuracy are clearly shown there is explicit evidence of checking answers. If a computer has been used for calculations a printout of formulae must be included. iii
4 Sales forecasting: Teaching notes Key skills in A-level Business Studies Application of Number N2.3 Interpret the results of their calculations and present their findings. They must use at least one graph, one chart and one diagram. Evidence must show the student can: select effective ways to present their findings; present their findings clearly and describe their methods; and explain how the results of their calculations meet the purpose of their activity. Guidance for assessors forms of presentation used are identified (Graphs and charts are the most likely to be used.) there is some explicit conclusion relating to the purpose of the piece of work. If a computer has been used to produce graphs, charts and/or diagrams, the candidate must also show how they would produce them manually.) : if you are in any doubt about assessment, always refer to The key skills qualifications, specifications and guidance: Communication, Application of Number and Information Technology levels 1 4 (QCA 2002) or to your awarding body. KEY SKILLS EXTENSION Students could use IT to search for sales figures and to produce their written evaluation. Students have the opportunity to generate the following key skills evidence: Information Technology IT2.1 Search for and select information for two different purposes. Evidence must show the student can: identify the information they need and suitable sources; carry out effective searches; and select information that is relevant to their purpose. Guidance for assessors ONE purpose For each purpose: the purpose for the piece of work is stated multiple search criteria have been used. Evidence may include: screen shots showing search criteria, lists of possible sources records of selected websites, documents or information from databases or CD-Roms assessor observation records of the candidate using multiple search criteria. iv
5 Sales forecasting: Teaching notes Information Technology IT2.2 Explore and develop information, and derive new information, for two different purposes. IT2.3 Present combined information for two different purposes. Work must include at least: one example of text one example of images one example of numbers. Evidence must show the student can: enter and bring together information using formats that help development; explore information as needed for their purpose; develop information and derive new information as appropriate. select and use appropriate layouts for presenting combined information in a consistent way; develop the information to suit their purpose and the types of information; ensure that their work is accurate, clear and saved appropriately. Guidance for assessors ONE purpose For each purpose: there are annotated drafts to show the entry and development of information (drafts showing the development of the written evaluation using IT.) there are printouts that correctly show both numerical data and formulae (Likely from the use of IT to analyse and develop the supermarket figures.) images have been developed or processed using IT and not simply imported from clip art or website sources. the types of information are identified eg text with images or with numbers, or images with numbers, or all three types together. (It is likely that all three types are combined in this acivity.) appropriate layouts have been used to present combined information in an integral way graphs and charts are used appropriately for the data (These are likely to be used in this activity.) there is evidence of how the candidate has developed the work the purpose is clear and the final work is fit for purpose and saved appropriately. s Evidence of development may cover IT2.2 and IT2.3. All work produced using IT must be authenticated by the assessor (ie signed and dated). The portfolio as a whole must contain information in the form of text, images and numbers. FOLLOW-UP This activity can be used in future lessons to reinforce the importance of, and difficulties involved in, obtaining accurate information for business decision-making. v
6 Sales forecasting: Student notes Student notes Sales forecasting in fastmoving consumer goods WHAT IT S ABOUT You are going to construct and analyse a sales forecast and forecasting techniques. This activity will help you to: develop your knowledge and understanding of market research techniques develop your analytical skills by the practical application, extrapolation and interpretation of data generate opportunities for producing key skills evidence in C3.1a, C3.3, N2.1, N2.2 and N2.3. WHAT YOU WILL BE DOING Your tutor will provide you with a set of resource sheets for use with this activity. Step 1: Research (2 hours) You are to assume the role of the marketing manager for the Franklin Group. In order to construct a more accurate sales forecast, you have decided that you need more information than just your own internal figures (see the data table in Resource 2). You need to research either the industry or a rival company s sales figures for the past three years. It doesn t matter if you can t get monthly sales figures, since Franklin s figures can be converted into quarterly, half-yearly or yearly results for the basis of comparison. More than one company can be researched if you wish. First you will have a class discussion to generate ideas about where and how this information can be obtained. This should be done as a whole group to generate as many ideas as possible. Step 2: Representation (30 minutes) Choose an appropriate form of presentation to represent Franklin s and the industry s or competitor s sales figures over the period being examined. Step 3: Analysis (30 minutes) Using suitable methods, identify any underlying trends for sales in your two data sets. To support your results, make relevant comments about the possible causes of these trends. Suitable methods might include determining average or mean sales levels across the years from the two sets of data and making comparisons. 1
7 Sales forecasting: Student notes Key skills in A-level Business Studies Step 4: Extrapolation (30 minutes) Using all the information you have generated, construct a sales forecast for the Franklin Group for the next 12 months. Choose a suitable form of presentation to represent your forecast and record clearly all your reasoning and the assumptions implicit in the forecast you have made. Step 5: Evaluation (30 minutes) You must now provide a written evaluation of this activity and your results. You need to include: how accurate and relevant you consider your sales forecast to be any alternative methods that you could have used to construct the forecast the benefits and drawbacks for the Franklin Group of sales forecasting in such a fast-moving market. 2
8 Sales forecasting: Student notes You have the opportunity to generate the following key skills evidence: Communication C3.1a Contribute to a group discussion about a complex subject. Evidence must show you can: make clear and relevant contributions in a way that suits your purpose and situation; listen and respond sensitively to others and develop points and ideas; and create opportunities for others to contribute when appropriate. Your portfolio should include explicit evidence of how you have met all the assessment criteria. Make sure you include: Your notes/preparation for the discussion. Written notes from your assessor on how you have met the assessment criteria. or Witness statements that show how you have met the assessment criteria. These must be signed off by your assessor. Optional Edited video/audio clips of the discussion. C3.3 Write two different types of documents about complex subjects. One piece of writing should be an extended document and include at least one image. select and use a form and style of writing that is appropriate to your purpose and complex subject matter; organise relevant information clearly and coherently, using specialist vocabulary when appropriate; and ensure your text is legible and your spelling, punctuation and grammar are accurate, so your meaning is clear. A statement identifying the type of document. The finished documents, one of which must include at least one image to aid understanding of the written text. Written notes from your assessor on how you have met the assessment criteria. Documents produced using IT must be authenticated as your own work by your assessor (ie they must be signed and dated). 3
9 Sales forecasting: Student notes Key skills in A-level Business Studies Application of Number N2.1 Interpret information from two different sources including material containing a graph. N2.2 Carry out calculations to do with: a amounts and sizes b scales and proportion c handling statistics Evidence must show you can: Plan and carry through at least one substantial activity that includes tasks for N2.1, N2.2 and N2.3. Choose how to obtain the information needed to meet the purpose of your activity; Obtain the relevant information; and Select appropriate methods to get the results you need. Carry out calculations clearly showing your methods and levels of accuracy; and Check methods to identify and correct any errors, and make sure your results make sense. Your portfolio should include explicit evidence of how you have met all the assessment criteria. Make sure you include: A statement of the purpose of your activity. A statement of the sources you have used and the information you have obtained. A note of how you chose your sources. At least one of your sources must contain a graph. Clear accounts of the methods you have used for your calculations and the level of accuracy you have used. Explicit evidence of checking answers, correcting any errors and making sure that your results make sense. If you use a computer for calculations, you must include a printout of formulae you have used. d using formulae. N2.3 Interpret the results of your calculations and present your findings. You must use at least one graph, one chart and one diagram. Select effective ways to present your findings; Present your findings clearly and describe your methods; and Explain how the results of your calculations meet the purpose of your activity. An explanation of how your calculations and findings relate to the purpose of the activity. If you use a computer to produce your graphs, charts and/or diagrams then you must also offer supporting calculations, sketches and/or explain in some way how you would produce them manually. 4
10 Sales forecasting: Student notes RESOURCE 1 THE FRANKLIN GROUP: COMPANY BACKGROUND The Franklin Group is a major concern in the high-street supermarket market. It also runs a subsidiary chain of DIY stores Franklins Fix It. The owners are concerned that, despite rising profits, they are losing market share in an increasingly competitive sector. They have decided to construct a sales forecast to aid them in their business decision-making. However, some of the managers feel that such a forecast will have limited relevance in such a fast-moving market. 5
11 Sales forecasting: Student notes Key skills in A-level Business Studies RESOURCE 2 FRANKLIN SUPERMARKET DATA TABLE Year Month Total monthly costs Monthly net profit million million Year Year Year (present year)
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