The following data represent the actual consumption of synthetic base oil used over the past 11 months in development drilling operations for a block of offshore well at an international location. The oil is used as akey component for the fluids used to drill the well.You are asked to forecast the consumption for the next month (December) and decide how much volume the sourcing group should purchase.

Please note that the drilling activity increased 50% over the past two months only due to the addition of one rig that is used in this block once a year (45 days well).

Due to the overall offshore activity, the demand for this oil has increased globally and prices may fluctuate.

1. Use the data to calculate December's consumption forecast using the 6-period moving average technique

2. Use the data to calculate December's consumption forecast using the weighted moving average technique

(hint: use 0.1 for the last two months and 0.2 for the previous 4 months)

3. With your peers, discuss5 other factors that will influence your decision and explain how they can affect the total inventory and product cost in the near future.

Month Period Oil Base Consumption (bbls) Total Monthly Cost (US$) Weights Forecast

Jan 1 85 8,500

Feb 2 70 7,000

Mar 3 77 7,700

Apr 4 80 8,000

May 5 86 8,600

Jun 6 190 19,000

Jul 7 77 7,700

Aug 8 81 8,100

Sep 9 80 8,800

Oct 10 136 14,960

Nov 11 100 11,000

December 12