MANAGEMEN SCIENCE

Management Science



Management Sciences

Question 01: Consistency in sales

The sales data for the given company represents a trend in which company has increasing sales over last six years. However, due to the sales decline, the last quarter of all the given years was not an efficient year. For example, in 2004, company has a decline in sales in last quarter of ear and it continues till 2010. However, the figures reduced their distance over the years. As supported by the trend analysis, sales in first quarter of 2005 are less than sales of first quarter of 2004. Company was not in good condition up to 2006 where sales were declining in first quarter as compared to previous years' same quarter. It can be observed from the given data that sales in first two quarters of each year is less than the ales of last two quarters. Furthermore, last quarter has a decline in sales each year. (Mentzer, 1999, pp. 8-12)

In the year 2011, sales are expected to increase in each quarter of the year as compare to same quarter of previous year. Improvement has been shown by the company to improve the sales of last quarter. The deficiency was shown in the table below that sales were declined by 69% in last quarter of 2004 as compared to third quarter of 2004. However, this difference is been covered by the company in next year's where this deficiency has been covered and reduced up to 93%. This is indicating that in coming years, this deficiency will be covered into efficiency and sales in last quarter will be more then sales of third quarter by 2011 or 2012.

The predicted sales forecast are based upon statistical analysis like scatter graph, trend analysis, and sales forecast judgmental techniques. Following factors are considered in making sales forecast for the last quarter of 2010 and for whole year of 2011:

Sales for last quarter are less than the sales of third quarter. However, company is improving its efficiency to increase the sales of last quarter as compared to sales of third quarter.

Company is growing each year with increased sales.

Average increase in sales is measured and provided in the data. This data predicts that company will have increased sales in last quarter of 2011 as compared to third quarter sales of 2011.

On above criteria it is forecasted that company will have an average sale of 1346000 in 2011. Sales of third quarter will be the highest but last quarter sales will retain or tit can have a minor decline which will be 2% as compared to sales of third quarter. (Mentzer, 1999, pp. 8-12) This will occur only if the company does not retain the consistency in policies and management performance.

The following data witness the accuracy and consistency in sales for the year 2011.

Forecasted Sales for 2011

Scatter graph Analysis

Figure 8 Scatter Graph 2010

Question 2

When economists try to predict the value that will take a macro-economic scale in the future, they begin by ...