Question
Assume that you are the production manager for Fast Current Kayaks of Washington State. One of the products that you make and sell is the
Assume that you are the production manager for Fast Current Kayaks of Washington State. One of the products that you make and sell is the Fast Current sea touring kayak paddle. You are responsible for ensuring that there is enough production capacity to meet demands (given the very high markup on the paddles).
Year | Quarter | Sales | Year | Quarter | Sales | |
2014 | Q1 | 32 | 2018 | Q1 | 115 | |
Q2 | 39 | Q2 | 117 | |||
Q3 | 29 | Q3 | 87 | |||
Q4 | 36 | Q4 | 102 | |||
2015 | Q1 | 55 | 2019 | Q1 | 137 | |
Q2 | 49 | Q2 | 117 | |||
Q3 | 42 | Q3 | 105 | |||
Q4 | 54 | Q4 | 111 | |||
2016 | Q1 | 65 | 2020 | Q1 | 156 | |
Q2 | 72 | Q2 | 136 | |||
Q3 | 51 | Q3 | 110 | |||
Q4 | 70 | Q4 | 126 | |||
2017 | Q1 | 96 | ||||
Q2 | 85 | |||||
Q3 | 80 | |||||
Q4 | 74 |
- Using the moving average method, compute the quarterly seasonal indices.
- Using the quarterly seasonal indexes you developed in number 1, deseasonalize the quarterly sales for the years 2014 to 2020.
- Create a time series graph showing. Note: all of (a), (b), and (c) must be in the same graph:
- the actual demand, by quarter, from 2014 to 2020
- the deseasonalized quarterly demand for the same time period, and
- the trend line of the deseasonalized sales volume. Show in your graph the trend line as well as the linear equation of that trend line.
Label the graph completely and accurately. Points will be deducted for graph not properly labeled.
4. Using the trend equation you developed in number 3, give your seasonally adjusted forecast for the quarterly sales in 2024.
5. Discuss what the consequences will be for Fast Current Kayaks if they simply used the trend forecasting model developed in #3c, without adjusting for seasonality (e.g. if they fail to adjust the trend forecast for seasonality) of the sales. In your discussion, address any important decisions, related to their operations, that they might make wherein the forecast information will be critical.
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