Calculator Allowed: No



Transcription of this question: 3.Fun-GamesFun-Games is a well known national private limited company, which prides itself on its innovativecomputer games and dedicated workforce. A recession is predicted for the coming three yearsin the domestic economy, so the managers Of Fun-Games are considering expansion intooverseas markets. The preferred option is expansion into nearby countries that are also members Ofa Free Trade Area* , although research showed that the exchange rate had fluctuated significantly inthe last few years.While accepting the need for a growth strategy, the marketing director is worried about Fun-Games ‘lack Of experience Of operating in overseas markets; cultural, linguistic and social difflculties maybe encountered. The financial director is worried about lack of funds for expansion. The managers OfFun-Games are considering the best option for external expansion and intend to use sales trend datafrom the previous seven years, to help make a decision.Fun-Games computer games sales record: 2001-2007Financial year2001200220032004200520062007Sales5000 units5500 units4500 units8600 units9100 units9300 units11 OOO units(a)(b)(c)Describe one limitation in the use Of the sales forecasting model forFun -Games.Using three years moving average:(i) Calculate the sales trend, the yearly variation and the cyclical variation.(Show all your working)(ii) Construct a graph using the sales trend figures from (i) and use it to forecastthe sales trend figure for 2009. (Show all your working)Advise the managers Of Fun-Games which method Of entry into overseasmarkets should be used.[2 marks][5 marks][3 marks][l O marks]

Leave a Reply