Example Using Forecasting Method 7: Project/Building Year-To-Date Increase Over Prior Year
In this example, leases 1, 2, and 3 are all in Building ULSTER.
This table lists the reported sales for leases 1, 2, and 3 for 2007 and 2008:
Month |
Lease 1 2007 |
Lease 1 2008 |
Lease 2 2007 |
Lease 2 2008 |
Lease 3 2007 |
Lease 3 2008 |
|---|---|---|---|---|---|---|
JANUARY |
30,000 |
40,000 |
25,000 |
28,000 |
21,500 |
30,000 |
FEBRUARY |
25,000 |
35,000 |
20,000 |
30,000 |
25,000 |
25,000 |
MARCH |
20,000 |
25,000 |
28,000 |
35,000 |
22,000 |
20,000 |
APRIL |
28,000 |
33,000 |
30,000 |
35,000 |
25,000 |
20,730 |
MAY |
30,000 |
34,200 |
35,000 |
25,000 |
23,000 |
27,837 |
JUNE |
35,000 |
23,800 |
25,000 |
20,000 |
24,200 |
32,469 |
JULY |
32,000 |
35,000 |
20,000 |
29,000 |
23,000 |
26,900 |
AUGUST |
30,000 |
24,000 |
28,000 |
32,000 |
33,200 |
33,977 |
SEPTEMBER |
27,000 |
29,000 |
30,000 |
30,000 |
20,000 |
29,204 |
OCTOBER |
33,000 |
22,000 |
35,000 |
39,000 |
25,000 |
24,821 |
NOVEMBER |
45,000 |
41,000 |
28,000 |
42,000 |
29,000 |
25,000 |
DECEMBER |
30,000 |
50,000 |
30,000 |
49,000 |
22,000 |
|
YTD (NOVEMBER) |
365,000 |
392,000 |
334,000 |
394,000 |
292,900 |
295,938 |
The system does not use lease 3 for calculating the building growth rate because it does not have sales for December. Without a full set of year-to-date sales, the growth rate calculation would be skewed and, therefore, incorrect. In this example, only leases 1 and 2 are used to calculate the building growth rate.
This calculation yields this result:
Building Growth Rate = Year-To-Date Sales 2008 ÷ Year-To-Date Sales 2007
392,000 + 394,000 ÷ 365,000 + 334,000
786,000 ÷ 699,000 = 1.1245 or 12.45 percent
Determine the sales estimate for December 2008 for Lease 3 by multiplying the sales figure for November 2007 with the percentage increase calculated for the building growth rate:
Estimated Sales (Lease 3, December 2008) = 22,000 × 1.1245 = 24,739.00