QUESTION 5 (20 Marks)

Ezemvelo Muskers purchases small, imported trinkets in bulk, packages them, and sells them to retail stores. The managers are conducting an inventory control study of all their items. The following data are for one such item, which is not seasonal. Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sales 51 55 54 57 50 68 66 59 67 69 75 77

5.1 Use a trend projection to estimate the relationship between time and sales (state the equation). (8 marks)

5.2 Calculate forecasts for the first four months of the next year. (6 marks)

5.3 In the context of the manufacturing sector, examine the problems associated to forecasting. (6 marks)