The rise in price of gas and other fuels has a direct impact over the costs and inflation in general. This company is a delivery service and as we consume gas as fuel, the difference in cost of gas will have ample impact over our business. …
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The following discussion will provide a detailed insight towards this issue. As a manager at this delivery service, it is my responsibility to provide the management with future projections about gas prices and to forecast and project gas prices in another 10 years. These steps are of utmost importance. The basic idea behind this discussion is to help the senior management plan everything on long term basis. No company today can survive without extensive consumption of fuel (Magnuson, 2008). This is especially true for the delivery service industry. The competitive edge lies precisely in the fact that the company must deliver all the good on time, every time. Thus it is of utmost importance to the company to be sure about their future gas fuel requirement and the costs associated with it.
Gas prices over the last 20 years:
The data used for this research is in fact Consumer Price Index - Average Price Data. The prices of Gasoline, unleaded regular, per gallon/3.785 liters from the year 1982 to 2011 have been studied.
While studying this data, a lot of statistical techniques and tools have been applied on this set of data. First of all, the data is available in monthly figures. Though monthly figures give us a clear picture of how the prices vary over time, the projections cannot be created without calculating the annual data. The annual mean or average price has been calculated by adding all the monthly figures for any year and divide the sum by 12 to get the average annual figure.
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