Analysis of Sales Trends of Tristar Air Coolers
Prerequisite Conceptual Understanding
Prerequisite Conceptual Understanding (PCU) material is the background material that would aid immensely in mapping the decision areas of this caselet and bring a synthesis amongst the relevant concepts. The participants/students should be encouraged to read this material to benefit from the broader perspectives outlined in the caselet.
- • Richard I. Levin and David S. Rubin, “Chapter 15: Time Series”, Statistics for Management, 7th Edition, Pearson Education, 2008
Synopsis
The caselet enables to comprehend the basics of time series analysis and the concept of predicting the future pattern of sales by collecting the past data using time series analysis. Tristar is a popular domestic air cooler manufacturer and supplier in Mumbai, India, which came to be counted among the best by 2002, within 3 years of its inception. However, the Founder-CEO observed that the company’s sales had not been uniform. He wanted to identify the reasons and improve the sales. Having collected the past data on quarterly basis, the Founder-CEO wanted to analyze the variations, trends and patterns, based on which he wanted to forecast sales for the future too. This caselet attempts to discuss seasonal and cyclical patterns of the sales.
Expected Learning Outcomes
- • The basics of time series analysis
- • The components – secular trends, cyclical variations and seasonal trends – of time series analysis
Assignment Questions
- I. Analyze the variations, seasonal and cyclical patterns in the sales of Tristar.
- II. What would be your suggestion to Tristar’s CEO?
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Exhibits
Exhibit (TN)-I: Intermediate Calculations for Computing the Trend
Exhibit (TN)-II: Cyclical Fluctuations Around the Trend Line
Exhibit (TN)-III: Relative Cyclical Residuals
Exhibit (TN)-IV: Percent of Trend Around the Trend Line
Exhibit (TN)-V: Computation of Specific Seasonal Index
Exhibit (TN)-VI: Typical Quarterly Seasonal Indexes