Organization's use this type of method on the bases of past sales forecast to predict its future sales forecast - which can be weakness and can ultimately affect financial planning. Why? Changes in both our economy and demand may vary overtime. Hence, using the percentage of sales model to predict past forecast to assume what their organization future forecast can be problematic. Therefore, financial management will have to make adjustments."Different conditions in the forecasting of the potential sales can cause management to adjust some of the assumptions made about marketing and production. By adjusting the predicted production levels and sales and marketing strategies, the organization can examine and adjust future assessments and forecast figures. A company can then make adjustments in the forecasting model in everything from production capacity to adjusting the price of individual products." (Bass, Brian)
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