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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...
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 1.
Analyse the sales data for MAG Petroleum by performing the following:
1. Draw a graph of the time series (comment on the data pattern).
2. Calculate the seasonal index (to 3 decimal points) for each month.
3. Forecast sales for January through December of the fourth year (make the forecasts to 3
decimal points).
4. Assume that January sales for the fourth year turned out to be $ 290,000. What was your
forecast error? Comment.
5. Recommend when the system that you have developed should be updated to account for
new sales data that will occur. Assume you have a computer software package.
Table 1: Lubricant Sales for MAG PETROLEUM ($1000s)
MonthFirst YearSecond YearThird YearJanuary242263282February235238255march232247265April178193205May184193210June140149160July145157166August152161174September110122126October130130148November152167173December206230235