Question

Johnson Plumbing Supply supplies everything a plumber needs to install bathrooms, kitchens and outside faucets for a home. The owner of the plumbing supply house sees a relationship between its sale of PVC (plastic) pipe and both housing starts and the average age of houses in its region of the country. Given this relationship, what sales forecasting technique will Johnson Plumbing be most likely to use?

1) The Delphi technique
2) Sales force composite
3) Buyers' intentions
4) Time series analysis
5) Statistical demand analysis

Answer 1

The most appropriate sales forecasting technique for Johnson Plumbing Supply is statistical demand analysis due to its ability to incorporate multiple relevant variables such as housing starts and the age of houses in the region to predict future demand.

Step-by-step explanation:

Considering the relationship Johnson Plumbing Supply has observed between its sales of PVC pipe, housing starts, and the average age of houses in the region, the sales forecasting technique most suitable would likely be statistical demand analysis. This method can utilize multiple variables, like the housing starts and age of houses, which are likely indicators of plumbing needs, to predict future demand for their products. By analyzing historical data and current market trends, Johnson Plumbing can more accurately forecast future sales.