DPX is a haulage company and the following data has been taken from its sales records for the last two years:Quarter Number of tonnes carried Year 1.1 23,430 Year 1.2 23,460 Year 1.3 25,425 Year 1.4. 52,260 Year 2.1 51,150 Year 2.2 44,880 Year 2.3 44,325 Year 2.4. 85,020The trend equation for the number of tonnes has been calculated and found to be x = 15,000 + 6,300 q where x is the number of tonnes and q is the time period (in quarters).
Based upon data collected over the last two years, the company has found that its quarterly costs have the following relationships with the number of tonnes carried:Cost Item Relationship Premises costs y = £450,000 Premises staff y = £105,000 + 0.3x Power y = £52,500 + 0.9x Driving staff y = £45,000 + 2.25x Other Costs y = £90,000 + 1.8xWhere y = the cost per quarter and x = number of tonnes per quarter.Required:
a) Using the multiplicative time series model, determine the expected number of tonnes to be carried in the second quarter of year four.b) Explain why the following cost relationships are in the following mathematical forms: Premises costs y = £450,000 Driving staff y = £45,000 + 2.25xc) Calculate the costs that you would expect in the second quarter of year four.d) Explain why there may be differences in the actual data from the second quarter of year four and the value you have predicted using the time series model.
e) Explain why it may be appropriate for a company like this to develop nonfinancial performance measures and identify four of the measures that may be used.
Requirements: 20 min | .doc file
