MANAGEMENT REPORT

TABLE OF CONTENTS

Introduction 3
Trend Line 4
Conclusion 10
Reference 11
INTRODUCTION

Decision making in business are considered to be the most significant part of an

organization. Well planned decisions made by an organization would lead to its
improvement. There are certain efforts that have to be made in order to undertake
a well-planned decision. This report deals analyzes the relation existent between
the budgeted sales, delivery cost and the actual sales affected by the organization.
The discussion is important as it will help the organization in deciding upon the
future course of action in terms of the product.
TREND LINE

Figure.1
Budgeted Sales (000s) 1. Budgeted sales has an uneven pattern
y = 0.5944x + 451.97
1000 R = 6E-05
900 2. Lowest sales being 50,000 in July
800
700 and highest being 900,00 in
600 Budgeted February.
500 Sales (000s)
400
300
3. Forecast not possible because of the
Linear
200 (Budgeted volatile nature.
100 Sales (000s))
0
TREND LINE(CONT.)

Figure.2

Delivery Cost 1. No pattern can be detected.

y = -2.5874x + 615.15
2. Highest in the month of February
1000
900 R = 0.0024
800
700
900,000 and lowest in the month of
600 Delivery Cost 330,000.
500
400
300 3. No trend can e analyzed
200 Linear
100 (Delivery Cost
0 )
TREND LINE SALES

Figure.3

1. No evident pattern
2. Highest in February with 800,000
and lowest in July with 70,000.
3. Forecast not possible due to volatile
nature.
TREND LINE(CONT.)

From the above trend lines it is clear that the management of ABC Ltd cannot
rely on the estimated budgeted sales and the delivery costs as the equation of
R2 is not at all closer to 1. From the analysis it is evident that there exists no
specific trend between in the sales and the delivery costs.
CORRELATION BETWEEN THE THREE

Correlation Budgeted Sales and delivery Cost: 0.985

Correlation Budgeted Sales and Actual Sales: 0.980
Correlation Delivery Cost and Actual Sales: 0.949

Correlation shows the relationship existing between the variables. For instance
,from the above we can interpret that when the budgeted sales changes by 1 the
delivery cost would change by 0.985.
CONCLUSION

Though the forecast for all the three variables is negative there exists a clear cut
relationship between the three. Also as is evident from the above analysis the
organization should try to reduce its delivery cost as in certain months the same is
greater than the budgeted and actual sales of the organization.
REFERENCE

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