Bottom Up Forecasting - Explained
What is Bottom Up Forecasting?
Written by J. Mance Gordon
Updated at April 21st, 2024
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What is Bottom-up Forecasting?
Bottom-up forecasting is a method of estimating future sales revenue. The process begins with estimating sales revenue of each product or product line. The number of potential sales per product is multiplied by the average sale value to get the potential revenue for a product line. These individual projections are combined to estimate the entire revenue of the firm.
Besides the specific product or components, other factors such as sales channel, geographic region, customer types are also taken into consideration. This micro approach is used to develop a macro view of the firms sales.