(a) Discuss important factors that affect decision about the appropriate forecasting technique to select. [5 marks]
(b) The sales data for XYZ Ltd (in million of shillings) for the year 2009 to 2012 inclusive are given below.
Quarter
Year 1 2 3 4
2009 10 34 94 28
2010 12 54 120 32
2011 16 48 124 66
2012 24 48 154 76
(i) Determine the trend in the data using least square method. [5 marks]
(ii) The percentage variation of each quarter’s actual sales for the four year period. [2 marks]
(iii) Forecast the sales for the 1st and second quarter of 2013 using multiplicative model. [4 marks]
(c) More often, financial decision makers apply qualitative approaches to forecasting that rely heavily on judgment and less on analytical tools. Discuss three of such judgmental forecasting methods. [3 marks]
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