Question

In: Operations Management

The sales volume for the last 7 years is given below by quarter in the following...

The sales volume for the last 7 years is given below by quarter in the following table:

Year	Sales by Quarter
Year	Q1	Q2	Q3	Q4
2013	289	410	301	213
2014	212	371	374	333
2015	293	441	411	363
2016	324	462	379	301
2017	347	520	540	521
2018	381	594	573	504
2019	444	592	571	507

Determine the values for the typical seasonal indexes and use them to obtain an estimate of demand for each quarter in 2020? Show all of your work.

Solutions

Expert Solution

Total average quarterly demand = 327.143 + 484.286 + 449.857 + 391.714 = 1653

--------------------------------------------------------------------------

After computing the seasonal index, we have to estimate the trend equation using linear regression analysis.

The linear trend equation is given as

y = a + b x

where y = demand to be forecasted

a = intercept

b = slope

x = independent variable

The trend equation is

y = 247.29 + 41.49 x

Using the above equation, the average demand for all seasons in year 2020 is calculated

y = 247.29 + 41.49 8 = 579.21

The above forecast is multiplied by the corresponsing quarterly seasonal indexes to obtain the forecasted estimates for each quarter of 2020.

Forecast for quarter 1 of 2020 = 579.21 0.7916 = 458.5

Forecast for quarter 2 of 2020 = 579.21 1.1719 = 678.8

Forecast for quarter 3 of 2020 = 579.21 1.0886 = 630.5

Forecast for quarter 4 of 2020 = 579.21 0.9479 = 549

The equation can be obtained using regression analysis in excel with average demand of all seasons as dependent variable. In excel go to data, data analysis and choose regression and select the variables as shown.

keosha answered 7 months ago

Next > < Previous

Related Solutions

Given that Xiaomi has grown its international operations significantly in the last 7 years, the company...

Given that Xiaomi has grown its international operations significantly in the last 7 years, the company has had to adopt an aggressive recruitment and training strategy. Based on the systems approach to HRD, the first step of the process is to conduct a HRD needs analysis. ( about 500 words)

The table below shows the monthly sales of a motorcycle store during the last two years....

The table below shows the monthly sales of a motorcycle store during the last two years. Month Sales Month Sales 1 195 13 155 2 210 14 120 3 190 15 135 4 170 16 110 5 180 17 122 6 156 18 97 7 134 19 85 8 155 20 110 9 145 21 85 10 165 22 78 11 128 23 66 12 135 24 45 Compute an exponential smoothing and an adjusted exponential smoothing for the data...

Five years of a well-established brand’s monthly sales volume data are shown in the table below....

Five years of a well-established brand’s monthly sales volume data are shown in the table below. As may be noted, there is substantial seasonality in this brand's sales. Forecaster Simulation: Problem #3 Data Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 January 5550 4782 5283 4760 4314 February 5398 4897 4544 4930 4476 March 4236 4693 4370 4930 4476 April 2977 3747 2419 3065 3350 May 2345 2235 2463 2546 2274 June 1198 1156 1887 1602...

The returns for AhhChocolate.com over the last 5 years are given below. Assuming no dividends were...

The returns for AhhChocolate.com over the last 5 years are given below. Assuming no dividends were paid, what is the 5-year “average” Holding Period (Geometric) Return for AhhChocolate? Year 1 return = 5.3% Year 2 return = - 4.6% Year 3 return = - 3.2% Year 4 return = 1.2% Year 5 return = 3.5% A) 0.368% B) 3.550% C) 8.400% D) 2.200% E) 0.440%

Given these sales figures over the last 7 weeks, your boss needs you to test two...

Given these sales figures over the last 7 weeks, your boss needs you to test two different forecasting methods (parts a and b below) to determine which method is best. For your measure of “best”, recommend to your boss that the company should use the method with the lowest mean absolute deviation (MAD). Then use that method to provide your forecast for week 8 in part c. Week Unit Sold 1 9,040 2 11,150 3 9,420 4 10,310 5 11,950...

Occipital Wraps Company makes both cash and credit sales. Budgeted sales for the last quarter of...

Occipital Wraps Company makes both cash and credit sales. Budgeted sales for the last quarter of the fiscal year are as follows: August September October Cash Sales $40,000 $60,000 $100,000 Credit Sales 300,000 340,000 440,000 Total $340,000 $400,000 $540,000 Experience reveals that 6% of credit sales will be uncollectible. Of the sales that are collectable 50% are collected in the month of the sale; 35% are collected in the month following the sale, and the remainder are collected in the...

A company’s contribution format income statement for last month is given below: Sales (40,000 units ×...

A company’s contribution format income statement for last month is given below: Sales (40,000 units × $22 per unit) $ 880,000 Variable expenses 616,000 Contribution margin 264,000 Fixed expenses 211,200 Net operating income $ 52,800 The company considers renovating its operations by purchasing a new machine that would reduce variable expenses by $6.60 per unit. However, fixed expenses would increase to a total of $475,200 each month. Using the new machine would not cause a change in monthly sales quantity...

Vehicle Sales: Consider the data below ( in thousands of units): year Quarter 1 Quarter 2...

Vehicle Sales: Consider the data below ( in thousands of units): year Quarter 1 Quarter 2 Quarter 3 Quarter 4 2016: 4072 4521 4452 4418 2017: 4010 4392 4399 4334 2018: 4092 4484 4277 4360 Obtain the seasonal factors and enter them into the appropriate yellow cells below: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Seasonal Factor Using the columns Year and Total (Annual Sales) below, obtain the regression equation from the Excel's Scatter Diagram Year Quarter 1...

Morton Company’s contribution format income statement for last month is given below: Sales (15,000 units ×...

Morton Company’s contribution format income statement for last month is given below: Sales (15,000 units × $30 per unit) $ 450,000 Variable expenses 315,000 Contribution margin 135,000 Fixed expenses 90,000 Net operating income $ 45,000 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits....

Morton Company’s contribution format income statement for last month is given below: Sales (43,000 units ×...

Morton Company’s contribution format income statement for last month is given below: Sales (43,000 units × $23 per unit) $ 989,000 Variable expenses 692,300 Contribution margin 296,700 Fixed expenses 237,360 Net operating income $ 59,340 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits....

Subjects