|
Quarter (2012)
|
Sales
(£000's)
|
Seasonal variation *
(£000's)
|
|
1. January - March
|
34
|
+2
|
|
2. April - June
|
30
|
-4
|
|
3. July -
September
|
40
|
+4
|
|
4 October -
December
|
34
|
-4
|
*The
formula ‘Actual minus Trend’ is used to
calculate the seasonal variations.
1. Calculate
and describe the sales trend shown in the table. [5]
Answer:
The sales figures in 000's in the question can be shown as the blue line.
You have been asked to calculate the red 'trend' line.
So....
If the seasonal variation figure is above the red line (a + number) you need to take that amount (in 000's) away from the sales figures.
You do the opposite if the seasonal variation is below the red 'trend' line.
|
Quarter (2012)
|
Trend
(£000's)
|
|
1. January - March
|
32
|
|
2. April - June
|
34
|
|
3. July - September
|
36
|
|
4. October - December
|
38
|
A rising trend. 1 mark
Rising by £2000 per quarter. 1 mark
2 marks for correct figures in the table.
1 mark for correct display of figures i.e. '£' and '000's
2. Forecast
the sales for each quarter of 2014, and the total sales value for 2014. You
will need to use the information provided in the table and your response to
question 1 In your answer. [5]
We calculated the trend for 2012.
We need to assume the same pattern continues through 2013 and 2014.
|
2013
|
Sales (£000's)
|
|
Q1
|
40
|
|
Q2
|
42
|
|
Q3
|
44
|
|
Q4
|
46
|
|
2014
|
|
|
Q1
|
48
|
|
Q2
|
50
|
|
Q3
|
52
|
|
Q4
|
54
|
So...
|
2014
|
Trend (£000's)
|
Seasonal Variation
|
Sales (£000's)
|
|
Q1
|
48
|
+2
|
50 (1 mark)
|
|
Q2
|
50
|
-4
|
46 (1 mark)
|
|
Q3
|
52
|
+4
|
56 (1 mark)
|
|
Q4
|
54
|
-4
|
50 (1 mark)
|
Total sales for 2014 are forecast to be: £202,000 (50 + 46 + 56 + 50)
(1 mark)
3. To what extent can a marketing manager rely on time series analysis
to forecast future sales? [10]
A linear trend (1) A marketing manager can use such a trend to forecast future sales value (1)
But this trend is not guaranteed to continue (1)
Seasonal variations only are used (1) - the influence of cyclical and random/catastrophic variations are not analysed (1)
Other quantitative techniques e.g. sampling, analysis of market research, could give alternative forecasts (1)
Qualitative analysis, e.g. customer surveys, should also be used (1)
Other quantitative techniques e.g. sampling, analysis of market research, could give alternative forecasts (1)
Qualitative analysis, e.g. customer surveys, should also be used (1)
(Conclusion/judgement)
Knowledge of the trend informs company management (1) - but the reliability of all quantitative techniques’ data is questionable (1)
Knowledge of other matters, e.g. competitor actions global issues e.g. recession in the markets the company operates in, are needed for a fuller judgement (1)
