Need to figure out the first quarter forecast for the question below. The manage

Question

Need to figure out the first quarter forecast for the question below.

The manager of a utility company in the Texas panhandle wants to develop quarterly forecasts of power loads for the next year. The power loads are seasonal, and the data on the quarterly loads in megawatts (MW) for the last four years are as follows: 94.4 116.11545 130.5 135.7 66.4 153.4 152.2 1772 169.0 115.5 101.3 100.7 129.7 149.1 168.8 The manager estimates the total demand for the next year at 689 MW. Use the multiplicative seasonal method to develop the forecast for each quarter (Round all intermediate calculations to three decimal places.) The first quarter forecast isMW. (Enter your response rounded to one decimal place

Explanation / Answer

We 1st calculate the total demand each year by adding the demands per quarter. As shown above the total demand is calculated.

Now, calculate the seasonal factor for each quarter:

year 1 quarter 1: 100.7/548.3 = 0.184

similarly we calculate all the seasonal factors by dividing respective demands per quarter by respective total demand in that year.

all the seasonal factors are listed below:

Now, we take an average of each quarter seasonal factor to find the average seasonal factor for each quarter:

quarter1: (0.184+0.189+0.188+0.183)/4 = 0.186

similarly we calculate for all quarters, the average seasonal factors are given above table.

total demand year 5 = 689

we multiply the seasonal factor each quarter with total demand to find the demand forcast in each quarter:

quarter 1 = average seasonal factor*689 = 0.186*689 = 128.17

quarter 2 = 0.239*689 = 164.8

quarter 3 = 0.273*689 = 188.13

quarter 4 = 0.302*689 = 207.9

1st quarter forecast = 128.17

Quarter Year 1 Year 2 Year 3 Year 4 1 100.7 94.4 115.5 101.3 2 129.7 116.1 154.5 130.5 3 149.1 135.7 166.4 153.4 4 168.8 152.2 177.2 169 Total Demand 548.3 498.4 613.6 554.2

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