Tata Timken Company Limited Case

a) The Quarter wise sales for all the years are as follows:

Sales (Crore)
Quarter 2007 2008 2009 2010

Q1 30.33 38.67 45 49.33

Q2 45 57.33 58 63.67

Q3 61 68 77 83.67

Q4 78 76.67 89.33 96.33

 QUARTER
2007 2008 2009 2010

120

100

80

60

40

20

0
Q1 Q2 Q3 Q4

The X-axis of the curve represents sales in crores and the Y-axis represents the
quarters Q1, Q2, Q3, Q4 of the four consecutive years starting from 2007 to 2010.

b) The seasonal variation was present in the data which was given for four years.
Every year in the first Quarter i.e. Q1 from 2007,2008,2009,2010 shows less sales
and the highest level of sales occurred in the fourth quarter Q4 in all the four
years.
c)
Question & Answer:

Q) Assuming that the January sale for the next year turns out to be Rs.105crore,
find out the vice president’s forecast error. If the error is large, what factors might
have contributed to the same? What should the vice president do to reduce this
error?

A) The sales for 2011 cannot scale up to 105 Crores by using any of the methods,
either moving averages method or the exponential smoothening method. The
sales forecast with these would give approximately 40 crores but definitely not
around 105 crores. If the sales have to be that way there should be hike in the
income of the customer and the market should be in the peak.