John runs a shop and he wishes to find out quarterly seasonal indices based on h

Question

John runs a shop and he wishes to find out quarterly seasonal indices based on his last year's sales, which are shown in the table below. 4. The quarterly average for the year is: (a) 1127 (b) 854 (c) 854 (d) 1217 5. The seasonal index for second quarter is: (a) 0.5768 (b) 0.7692 (c) 0.9349 (d) 0.7611 When a trend line is fitted to deseasonalised data, forecasted values need to be reseasonalised using the rule: (a) Seasonalised forecast = actual index times seasonal figure (b) Seasonalised forecast = actual index times deseasonalised figure (c) Seasonalised forecast = seasonal forecast times deseasonalised index (d) Seasonalised forecast = seasonal index times deseasonalised forecast

Explanation / Answer

Average sales for the year = (790+650+860+1080)/4 = 845

Seasonal index for second quarter is 650/845 = 0.7692

We reseasonalise using the formula : Deseasonalised forecast*seasonal index

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