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Assignment #1 QBA 202 Spring 2012 Diksha Mulani g00040358 Kanishka Ajwani g00043033 Menaka Gangwani g00039840 Section 8

2 Executive Summary

3 Part I

Quarterly Sales for National Flights

12000 10000 8000 6000 4000 2000 0 1 2 3 4 5 6 7 8 9 10 11 12 Quarter National flights

Quarterly Sales for International Flights

14000 12000 10000 8000 Quarter 6000 4000 2000 0 1 2 3 4 5 6 7 8 9 10 11 12 International flights

4 Part II Seasonal Forecasting for International Flights Date for international flights segregated into 4 seasons: Seasons Quarter 1 Quarter 2 Quarter 3

Low-sales Medium 1 High Sales Medium 2 Totals

6560 8180 12520 9880 37140

7204 8400 11424 10008 37036

6924 8580 12188 9552 37244

Step 1: Computation of average historical sales for each season Formula used: Total sales of each season/Number of quarters

STEP 1 Average sales for each season

Low-sales Medium 1 High-sales Medium 2

6896 8386.6667 12044 9813.3333

Step 2: Computation of average historical sales for overall seasons

5 Formula used: Total of seasonal average/Number of averages (4)

STEP 2 Average for over all seasons 9285

Step 3: Calculation of seasonal index Formula used: Average historical sales per season/Average of overall seasons

STEP 3 Seasonal Index

Low-sales Medium 1

0.7427 0.9032

High-sales 1.2971 Medium 2 1.0569

Step 4: Estimation of next years forecast using nave method

STEP 4 Estimation of next years forecast 37244 Using Nave Method

Step 5: Seasonal forecast values for next year

6 Formula used: 37244/4 * seasonal index STEP 5 Seasonal Forecast values for next year Low-sales Medium 1 High-sales Medium 2 6915.3103 8410.1511 12077.7258 9840.8128

Conclusion: Sales forecast values for the next year will be expected to fluctuate from approx. $6915 to $12077.

7 Trend projection was used for regional flights, since the demand is increasing, as shown in the graph below:

Quarterly Sales for Regional Flights

10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 1 2 3 4 5 6 7 8 9 10 11 12 Quarter Regional flights

The equation is as follows: y = a + bx, where b = [Sigma xy n(average of x values)(average of y values)]/ [sigma x2 n (average of x values)2] a = Average of y values b (average of x values)

In the case of regional flights, b = 259.72 and a = 6114.32

Thus the linear equation for regional flights is y = 6114.32 + 259.72x

8 Forecast values for next year (Year 4) [table] Period 13: 9490.42 Period 14: 9750.12 Period 15: 10009.82 Period 16: 10269.52 Analysis and conclusion