SCENARIO 16-15-A
You Are the CEO of a Diary Company

question 16

Short Answer

SCENARIO 16-15-A
You are the CEO of a diary company. The total milk production (in gallons) from your company
over the past 30 years are presented below and also contained in the Excel file SCENARIO 16-
15-A.XLSX. $$\begin{array} { l r r r r r r r r r r r } \text { Year } & 1986 & 1987 & 1988 & 1989 & 1990 & 1991 & 1992 & 1993 & 1994 & 1995 \\& 1996 & 1997 & 1998 & 1999 & 2000 & 2001 & 2002 & 2003 & 2004 & 2005 \\& 2006 & 2007 & 2008 & 2009 & 2010 & 2011 & 2012 & 2013 & 2014 & 2015 \\\text { Milk } & 150201 & 172719 & 171357 & 157121 & 155727 & 152974 & 153443 & 158548 & 162614 & 164210 \\\text { Prod } & & & & & & & & & \\& 159127 & 153866 & 165992 & 177843 & 167477 & 163821 & 161700 & 170348 & 174105 & 185103 \\& 184670 & 173385 & 159695 & 173641 & 165706 & 171164 & 168706 & 150684 & 179314 & 163802\end{array}$$ You want to predict your company's future total milk production using the linear trend, quadratic
trend, exponential trend, first-order autoregressive, second-order autoregressive and third-order
autoregressive model.
-Referring to Scenario 16-15-A, what is your forecast for 2016 using the exponential-trend
model?

---

Definitions:

Collusion

A non-competitive, secret, and often illegal agreement between rivals aiming to disrupt the market's equilibrium by controlling the market price, production, or marketing of goods and services.

Empty Threat

In a sequential game with two players, a noncredible (bluffing) statement made by Player 1 that threatens a penalizing action against Player 2 if Player 2 does something that Player 1 does not want Player 2 to do. Opposite of credible threat.

Coercion

The act of compelling or forcing someone to act in a certain way through pressure, threats, or the use of force.

Threatened Firm

A business that faces potential decline or failure due to competitive, economic, or operational challenges.