Hi Neamul, you can download examiners' reports for previous case study sittings from the Exam Resources page of the Astranti website :) www.astranti.com/cima/syllabus/new/examresources/
How can you assume that 20X1 Q2 will be x = 6. I would take the quarter 2 and always being 2 and so I would get 5000 x 2 and not 5000 x 6. I don't think the question makes this clear.
Hello there, From a practical standpoint, the reason x = 6 is because we're looking at seasonal variations from the beginning of 20X0 Q1 all the way up to 20X1 Q2. So, if we're looking at 20X1 Q2, then we're effectively looking 6 quarters into the future from 20X0 Q1. 20X0 Q1 20X0 Q2 20X0 Q3 20X0 Q4 20X1 Q5 20X1 Q6 Mathematically we do this because our y-intercept will be 580,000 when we look at quarter 0. In quarter 1 then it will increase by 5,000 per quarter, resulting in the 585,000 we see in Q1. This is an upwards trend and so, in 20X1 Q6 if we used x = 2 our trend value would be £590,000, which is wrong because our forecast is telling us the trend increases by £5,000 each quarter. By quarter 6, the trend value will be (£5,000 x 6) + £580,000 as a result.
could you provide the operation level past q and solution??
Hi Neamul, you can download examiners' reports for previous case study sittings from the Exam Resources page of the Astranti website :)
www.astranti.com/cima/syllabus/new/examresources/
How can you assume that 20X1 Q2 will be x = 6. I would take the quarter 2 and always being 2 and so I would get 5000 x 2 and not 5000 x 6. I don't think the question makes this clear.
Hello there,
From a practical standpoint, the reason x = 6 is because we're looking at seasonal variations from the beginning of 20X0 Q1 all the way up to 20X1 Q2.
So, if we're looking at 20X1 Q2, then we're effectively looking 6 quarters into the future from 20X0 Q1.
20X0 Q1
20X0 Q2
20X0 Q3
20X0 Q4
20X1 Q5
20X1 Q6
Mathematically we do this because our y-intercept will be 580,000 when we look at quarter 0. In quarter 1 then it will increase by 5,000 per quarter, resulting in the 585,000 we see in Q1. This is an upwards trend and so, in 20X1 Q6 if we used x = 2 our trend value would be £590,000, which is wrong because our forecast is telling us the trend increases by £5,000 each quarter. By quarter 6, the trend value will be (£5,000 x 6) + £580,000 as a result.