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Dear Sir,
Do we have to calculate the forecast for sales using time series analysis and least square analysis? or only we have to explain what is forecast by others ?You do not have to work out the regression line or perform the time series analyses. However, you might have to use the results provided in the question to produce forecasts (that’s the point of both analyses). You would also need to be aware of the limitations of both methods.
this is the question asked in 2013dec,could you pls tell me how examiner calculated .it says using best guess approach,a trend value of 149 might me hypoythesised for quarter1 of 2o13,giving predicted value of 134.3 (149-14.7 ) i also would like to know from where this 149 and 14.7,i cannot find any hints about this in the question
I’m not sure what the examiner means by best guess, or how he got to 149. If I had been doing it I would argue that the trend has gone from 131.0 to 146.25, an increase of 15.25 in 9 increments, so 1.69 per quarter.
146.25 (quarter 4, 2012) + 1.69 = 148 (not the 149 of the examiner). I would then reduce this by the seasonal adjustment for quarter 1 of 14.7.
This wold be perfectly acceptable. The point being made is that there is no ‘correct’ way of predicting the future. You look at past results and try to extrapolate them in a reasonable way.
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