PROJECT ABOUT FORECASTING

Forecasting

Introduction

Reliance commerce (RIL), India's large-scale individual part commerce, is committed in the yield of textiles, synthetic fibers, fiber intermediates, petrochemicals, and oil and gas and refining. It is headquartered in Mumbai, India and uses about 24,700 persons. The enterprise documented entire income of INR1,557,885.1 million (approximately $33,993.1 million) in the financial year accomplished pace 2009 (FY2009), an increase of 8.9% over FY2008; while its snare income (after taking into account other earnings and variety in supplies) was INR1,512,240.1 million (approximately $32,997.1 million) in FY2009, an increase of 10.3% over FY2008. The functioning profits of the commerce was INR196,854.1 million (approximately $4,295.4 million) in FY2009, a down turn of 18.3% mismatched with FY2008. The snare profits was INR149,687.2 million (approximately $3,266.2 million) in FY2009, a down turn of 23.3% mismatched with FY2008.

 

Aim and objective

The objective of this task is to request befitting time sequence forecasting procedures in alignment to assist the administration of the Reliance commerce to select an befitting forecasting form that could be utilised to forecast sales, cost and earnings with a sensible grade of accuracy. The commerce has supplied annual facts and numbers which wrappings the time span from the starting of 2000 until the middle of 2009. The obligations of work are particular in the next section.

 

Estimation of Growth in percentage change

Sales

It is evident from Figure 1 when analyzing the data from Reliance that the percentage change in sales fluctuates from year to year. Following the millennium Reliance bounced back in 2001 from the previous year with a increase of sales accumulating to 13%, according to BBC (2001a) in the first quarter of that year the profit percentage lay at 112%, mainly due to the completion and delivery of many airplanes to the buyers and also the fact that there were still many more orders to complete. 2001 proved to be a disastrous year for airlines and manufacturers because of the sudden attacks of 9/11. Due to 9/11 the amount of contracts signed with Reliance quickly deteriorated and thus gave the company a negative change in percentage sales for the next two years (Gahan, 2002 and Armbruster, 2002). Forecasted sales for Reliance in 2002 looked very unpromising, therefore the company let go of 30,000 employees (BBC, 2001b) that year. There was a sudden change in the outlook for the company's future when China signed a contract with Reliance requesting 30 new airplanes.

Figure 1: Sales and % change in Sales

Year

Sales ($m)

%change in Sales

2000

689696546

 

2001

698978963

-11.50%

2002

705696894

13.40%

2003

723696984

-7.50%

2004

735698961

-6.64%

2005

737104600

4.38%

2006

909379400

2.22%

2007

1204311000

14.75%

2008

1430049800

7.89%

2009

1557885100

-8.25%

Total

9392498248

 

In 2006 had an increase of 15% in sales from the previous year; the justification for this increase is due to the amount of military contracts the company obtained during 2002-2003 (Armbruster, 2002). The company received an enormous tax refund in 2004 which assisted in the increase of their profits for 2005, but aside from that the Indian government produced an order with the company amounting to $8 billion dollars.

In 2008 the company witnessed a decrease in sales due to the current economic crisis at the moment; despite the harsh times the ...