Applying Time Series Methodologies

MEMORANDUM

TO: Myra Reid

FROM:

DATE: April 30, 2012

SUBJECT: Company Forecasting

CC: Board of Directors

In order for the business to remain successful it is in the best interest of the company to have an accurate forecast and to make the right business choices. For Blue Incorporated this is the case for them. For three weeks an exact forecast was kept, to arrive at the desired decision for Blue's Inc. future sales forecast.

For the first week the advertising budget was set at $169 million. With that the markets share of Blue's Inc. is six percent of $40 billion in the denim industry. With the budget at $169 million this guarantees a bright future for the company.

Week two's task at hand was to fix the production levels. By using the two-period weighted moving average model with a weight of 0.9 with the most recent observation and also putting the production levels at 42.00 million units was a good decision. It indicates that the company should produce at least 47.00 million units to meet the current demand. So far the choices made have been good. So going into week three the same is expected.

As far as week three goes, looking at the graph and comparing numbers on the graph, choosing the centered moving average model seemed to be the best with the data ranged for six years. Then when choosing to fix the production levels it was seen fit to let the quarters reflect the sale figures forecast by the centered moving average model. The forecast reflected that the first quarter should have 12 million units, the second 14 million units, the third with 13 million

units, and the last quarter should have 20 million units.

The forecast for Blue's Inc. shows they will have a very successful future and will be able to endure the competition for many years to come. By the decisions made, the company has been saved and by using the time series methodologies the market analyst could establish what will make the company more money and know what will cost them money. Thank you very much for the opportunity to assist your company.

¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬University of Phoenix. (2012). Applying Time Series Methodologies Simulatioin [Multimedia]. Retrieved from University of Phoenix, RES342 website.