MAG Petroleum is an SME specialising in the sale of lubricants for industrial use. The company, which is owned and operated by Angelina, has just completed its third year operation. During this time, Angelina has sought to establish a reputation for the company as a supplier of high-quality lubricants. The efforts made by Angelina and her staff have proved successful, and her company has become one of the best and fastest growing privately owned company in Zambia. Angelina has concluded that in order to plan better for the growth of the company in the future, it is necessary to develop assistance that will enable her to forecast lubricant sales by month for up to one year in advance. Angelina has available data on the total lubricant sales that were realized during the previous three years of operation. These data are provided in Table Q2. (a) What forecasting method would you recommend to Angelina? Justify your choice. (b) Forecast sales for January through December of the fourth year using the forecasting method you recommended in part (a) above. (All calculations should be to 3 decimal points). Table Q2: Lubricant Sales for MAG PETROLEUM ($1000s) Month First Year Second Year Third Year January 242 263 282 February 235 238 255 March 232 247 265 April 178 193 205 May 184 193 210 June 140 149 160 July 145 157 166 August 152 161 174 September 110 122 126 October 130 130 148 November 152 167 173 December 206 230 235
MAG Petroleum is an SME specialising in the sale of lubricants for industrial use. The company, which is owned and operated by Angelina, has just completed its third year operation. During this time, Angelina has sought to establish a reputation for the company as a supplier of high-quality lubricants. The efforts made by Angelina and her staff have proved successful, and her company has become one of the best and fastest growing privately owned company in Zambia.
Angelina has concluded that in order to plan better for the growth of the company in the future, it is necessary to develop assistance that will enable her to forecast lubricant sales by month for up to one year in advance. Angelina has available data on the total lubricant sales that were realized during the previous three years of operation. These data are provided in Table Q2.
(a) What
(b) Forecast sales for January through December of the fourth year using the forecasting method you recommended in part (a) above. (All calculations should be to 3 decimal points).
Table Q2: Lubricant Sales for MAG PETROLEUM ($1000s)
Month |
First Year |
Second Year |
Third Year |
January |
242 |
263 |
282 |
February |
235 |
238 |
255 |
March |
232 |
247 |
265 |
April |
178 |
193 |
205 |
May |
184 |
193 |
210 |
June |
140 |
149 |
160 |
July |
145 |
157 |
166 |
August |
152 |
161 |
174 |
September |
110 |
122 |
126 |
October |
130 |
130 |
148 |
November |
152 |
167 |
173 |
December |
206 |
230 |
235 |
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