Applications and People in Organisations

1
Applications and People in Organisations

• Lecture 4
• Trends and Relationships

2
Trends

• A trend is a behavioural pattern
• Historic trends combined with current trends can
  help to predict future trends.
• Often there is an overall trend with variations
• These variations can be cyclic ie. occurring in a
  regular pattern or sporadic.
• Variations usually have an underlying cause.

3
Example Childrens Toys
4
Define Trends
5
Analyse trends

• Overall upward year on year trend
• Cyclical variation causing rapid increase in
  sales between October and December followed by a
  rapid fall in January.
• Plateau region between February and September
• Observation
• Plateau is shorter in year 02

6
Forecasting Tips

• Start by mapping on the overall trends
• Consider each variation and observation
• Is it cyclic or sporadic
• What caused it
• Is it likely to re-occur
• If it does re-occur will it follow the trend
• Build in variations and observations with care.
• Assess the probability of the forecast outlining
  any assumptions and risks.

7
Forecast
Forecast for 2003
8
Assess the probability

• Assumption 1. There will be a constant increase
  in sales year on year probably based on inflation
• Assumption 2. The well defined cyclic variation
  is likely to reoccur in a similar form as is
  almost certainly relates to Christmas.
• Assumption 3. The plateau shortens and this might
  be a continuing trend as Christmas shopping seems
  to begin earlier each year.
• How probable is this?????????????????

9
Example Sun cream
10
Define trends
11
Analyse Trends

• Bimodal distribution two peaks
• Could relate to Summer and winter holiday seasons
• Low plateau between October and December in 01
  moving to November to January in 02
• General upward trend for summer peak and plateau
  probably relating to inflation
• Downward trend for winter peak could this have
  been a bad winter could this be responsible for
  the shift in low plateau??

12
Forecast
13
Assess probability

• Assumption 1. There will be a constant increase
  in sales year on year probably based on inflation
  
• Assumption 2 There will be a continuous decline
  in the winter holiday market
• Assumption 3. The winter season will move
  steadily towards spring.
• How probable is this???????????????

14
Example UK Holidays
15
Define Trends
16
Analyse Trends

• Assumption 1. There will be a constant increase
  in sales year on year probably based on inflation
  
• Assumption 2 The sudden fall and resulting
  plateau in 01 is a sporadic variation possibly
  owing to Foot and Mouth disease.
• Assumption 3 The steady drop in September 02 is
  cyclic possibly owing to spending in other areas
  eg. Christmas.
• How probable is this????????????????

17
Forecast
18
Assess Probability