Today is 1 December 2021. A new range of smart running shoes is currently being developed by TreadCushy. These smart running shoes in have tech in the sole which connects to an app to monitor metrics such as run speed, distance and terrain. It is expected that the range will launch in the first half of 2022.

You receive the following email:

From: Ben Numa, Finance Manager

To: Finance Officer

Subject: Forecasting sales and lease for new laptops

I had a meeting with Harry Blanc, Product Development & IT Director, yesterday. He wants to understand more about the size of the potential market for smart running shoes in Europe for the first 2 quarters of 2022. He has found some information based on past sales volumes (Chart 1 and Table attached) but would like to know how this could be used.

Please prepare a briefing note for Harry which explains:

Question 1

What the three trend lines and seasonal variation information shown in Chart and Table 1 indicate about historic sales of smart running shoes in Europe and how this information could be used to determine a forecast of sales volumes for our new range for the for first 2 quarters of 2022. (40 marks)

Chart 1: Trend lines* *The chart shows the last three trend lines for sales of digtal smart running shoes in Europe. Q1 each yearis the period January to March. Table 1: Average seasonal variations