I need you to write a research article. This coursework tests your basic financial mathematics and statistical modelling skills, using spreadsheet software (Excel – formulae, financial maths, graphical features, Data Analysis and Solver tools) as well as your awareness of the reality of how financial products work. Your answers are to be presented in an essay/report format, for which you will use a word processor. In writing your report, please:
· state and explain all assumptions, on which your answers are based;
· clearly indicate your answer/recommendations;
· no evidence of use of excel will result in a fail mark for this element of the coursework component of your mark;
· support any answers with the appropriate calculations to arrive at the answer;
· include selected screens of formulae underlying computed values. Failure to demonstrate you have created appropriate formulations on excel will be severely penalised. Despite the fact that you will be submitting the Excel file as well, your report is a stand-alone document, meaning a reader should not be required to look at the Excel file to understand your analysis, findings and recommendations;
· please note that adequate usage of the excel calculations in the report is important. This means that the key data/findings needs to be included in the report and appropriate referencing needs to be done, i.e. the relevant cell/table/range in the relevant tab of the excel file mentioned at the point of the report when it should be consulted.
The report will have a maximum of 10 pages (including any Appendixes; penalties will be applied for longer submissions – you are required to develop your judgement on what is and isn’t important). Ten percent of the total mark is allowed for quality of the presentation and these marks are distributed among the questions.
Deadline: The coursework is to be submitted on Moodle no later than 8.00pm on Monday 13th March 2017. You will need to submit a Word document with the report (see instructions above) and an Excel file with the calculations. If in doubt on how to submit both files on Moodle, please contact Dilip Parmar in the course office allowing sufficient time for him to clarify any doubts you have in advance of the submission deadline.
Also, please note that late submissions will be penalised, no matter how small and irrespective of computer or internet crashes or any other last minute unexpected problem, so make sure you plan your submission allowing enough time to overcome any last minute problems. This includes keeping up-to-date back-ups of your work!
This coursework is your own (individual) work. Any student found guilty of plagiarism will be penalised. Standard penalties for late submissions are applicable.
Question 1: (10%)
With the reduction in sales driven by the financial crisis which have not fully recovered yet, Office Trade, a wholesaler of office equipment has been conducting a review of its stock ordering system. The management of the company has asked each of the analysts in its finance department, to look at each of its products, and you were asked to look at book shelving units. Having made your research, you have determined that it is uncertain when the recovery will start, so you have established the following demand scenarios for the next 12 months: