What is the term for the process of projecting sales and inventories based on historical data and market trends?

The term for the process of projecting sales and inventories based on historical data and market trends is forecasting. Forecasting is essential in purchasing and merchandising as it allows businesses to make informed decisions regarding inventory levels, staffing requirements, and overall supply chain management. By analyzing past sales data, seasonal trends, and market conditions, companies can predict future demand, which aids in optimizing inventory to meet that demand without overstocking or running out of products.

Effective forecasting helps businesses minimize excess inventory costs, ensuring that they have the right products available at the right time. In addition to historical data, it often incorporates quantitative and qualitative methods to enhance accuracy.

The other options, while related to overall business strategies or analyses, do not specifically refer to this projection process. Strategic planning focuses more broadly on long-term goals and directions, market analysis involves evaluating market conditions and competition, and planned merchandising concerns the strategic selection and presentation of products for sale, which do not inherently include the aspect of projecting future sales and inventories.