Sale Forecasting of Merck Pharma Company Using ARMA Model

Research Journal of Finance and Accounting. ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online), Vol. 6, No. 21, 2015

7 Pages Posted: 30 Nov 2015

See all articles by Nawaz Ahmad

Nawaz Ahmad

RTS (Research, Trainings, and Solutions); Institute of Business Management (IoBM)

Fouzia Nasir

Indus University

Usman Aleem

Pakistan Air Force - Karachi Institute of Economics & Technology (PAFKIET)

Date Written: November 29, 2015

Abstract

This study aims to develop a stochastic framework of model to forecast future sales for pharmaceutical industry. In this regard, the study focuses on Merck Pharmaceutical monthly sales data. This study examines the Sale forecasting models. The study includes monthly data published in the annual reports of the company from Jan. 2008 to Dec. 2012. The time series diagram shows unequal means over the time period that suggests the data is stationary. Having transformed the data, ARMA (1, 1) model is applied which shows that there will be increase in sales by $6.784m given that in the last month sales were $1bn. On the contrary, last month’s residual has an adverse effect on current month sales up to the extent of $432.942m. In this study AR (1) and MA (1) both the processes are significant at 1%.

Keywords: Sales forecast, ARMA (1, 1), Pharma Industry

JEL Classification: C12, C22, C53

Suggested Citation

Ahmad, Nawaz and Nasir, Fouzia and Aleem, Usman, Sale Forecasting of Merck Pharma Company Using ARMA Model (November 29, 2015). Research Journal of Finance and Accounting. ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online), Vol. 6, No. 21, 2015. Available at SSRN: https://ssrn.com/abstract=2696734

Nawaz Ahmad (Contact Author)

RTS (Research, Trainings, and Solutions) ( email )

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Karachi, Sindh 75500
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00923009292422 (Phone)

Institute of Business Management (IoBM) ( email )

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Karachi, Sindh 75190
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HOME PAGE: http://www.faculty.iobm.edu.pk/staff/nawaz-ahmad/

Fouzia Nasir

Indus University

Karachi, Sindh 67000
Pakistan

Usman Aleem

Pakistan Air Force - Karachi Institute of Economics & Technology (PAFKIET)

Ibrahim Haidary, Korangi Creek
Karachi, Sindh
Pakistan

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