The monthly number of permits granted for building houses in a large city is sea

Question

The monthly number of permits granted for building houses in a large city is seasonal (there tend to be more permits granted for construction during spring and summer months than during winter months) The following table shows the monthly seasonal indexes for building permits: Using several years of permit data, beginning in November of 1999 (i.e., t = 1 corresponds to November of 1999). an analyst reported that the trend line that describes the monthly permit data is of the form T_t = 788 + 5t. Assuming that a multiplicative model can be used to describe the building permit data generate a forecast for the number of building permits that you expect will be granted in February of 2004

Explanation / Answer

t = 52 for Feb,2004 (Starting with t =1 from Nov,1999)

Putting the value of t in the trendline we get

T = 788 + 5x52 = 1048

With seasonality index, the no. of building permits that will be granted in Feb, 2004 = 1048 x 0.89 = 932.72~933

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