Imagine that you manage a production line. To be profitable, your line must sell at least 500 products per month. Sales are currently waning, as the market for your product has become saturated by competitors’ products.
In the future, another product line is planned to replace your current line, as the product becomes unprofitable. You will manage the new production line, and your team will stay intact. The program office has asked you to project when sales will fall below the profitability line. The historical sales figures are as follows:
MonthSalesMonthSalesJan-11850Jan-12830Feb-11850Feb-12836Mar-11850Mar-12825Apr-11850Apr-12831May-11850May-12802Jun-11850Jun-12794Jul-11850Jul-12740Aug-11850Aug-12758Sep-11850Sep-12720Oct-11850Oct-12704Nov-11850Nov-12692Dec-11840Dec-12670
Based upon historical sales figures and in light of the 500 product minimum sales threshold, provide the following information:
- Determine which forecasting method is most appropriate for the problem. Explain why your choice is optimum and why other methods are not as effective.
- Perform an empirical analysis – establish a forecast for when sales will fall below the profitability threshold.
- Report to the program office with a recommended date that the production line should be converted to the new product.
Your submission should be 2-3 pages in length (excluding the title and references pages). Be sure to use appropriate line spaces between each question, so that your work is organized and easy to follow. Your assignment should follow APA guidelines by including a title page, be in Times New Roman, 12–point font and double spaced. Be sure to use APA-style citation when citing sources to support your claims.
