Robert presented the report on the sales figure (see Table 3). ABCtronics was using a simple linear regression model for predicting the sales figure. However, the new interns, who recently joined SMT, indicated a few problems with the existing method. They proposed a new method to predict sales. They argued that their multiple linear regression model had better explanatory power and was devoid of multicollinearity problems. Looking at the presentation, Phil figured out that he was also asked to predict the sales figure for various demand scenarios. But Phil adopted a different approach. While looking at the screen, he did some quick mental calculation, and the results were not matching with the one presented. He nervously glanced at Jim. Jim was listening to Roberts analysis with rapt attention. As the meeting was coming to an end, Phil could sense that ABCtronics needed to deal with a number of issues, and they needed to do it quickly. The company was entering into the second quarter of the year. ABCtronics immediately had to take corrective measures; otherwise it might be too late. As Stuart, Mark, and Robert were leaving the board room, Phil waited quietly for Jim. He knew that he was asked to attend todays meeting for a reason.

As everybody left the room, Jim turned to Phil and asked, What do you think of todays meeting? Phil kept quiet. Many aspects of the meeting left him confused. Jim went on, I need an honest opinion before going ahead. Look at all the reports and analyze. Tell me what do you think? You have two days to prepare. Let us meet on Monday. As Jim uttered those words, only one thought came to Phils mind, There goes my weekend plan! Have you prepared an analysis of the sales figures I asked for? Phil said yes (see Table 4). Do you think we can sell more than 3 million chips this year? Phil said nothing. He has done the calculation; the possibility stands below 50% level. Jim figured out the answer from Phils silence. He asked, What about 2.5? Phil replied, I think we will fall short of that number, the industry overall is experiencing a medium level demand. But the difference is not very large. If we get an order from Customer PQRsystems, probably we can make it. Jim sighed for a moment and said, Let us see where we arrive independently with our analysis. On Monday, after our meeting, I shall meet with Stuart and Mark. We have gone through a prolonged rough patch. The time has come to take some course correction; otherwise competition will knock us to the ground.

What do you think of the sales prediction model proposed by SMT interns? According to Phil, what is the expected sales figure for ABCtronics in this year? How good is their chance to reach the target sales volume of 3 million chips?

Note. "Economic condition: 1 signities tavorable market condition and U signifies otherwise. Note. "Economic condition: 1 signities tavorable market condition and U signifies otherwise