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Forecasting

Question 6

Seasonal variation

A trend analysis reveals that the underlying trend of sales units can be
calculated using the equation:

Sales units = 1,350 + 6t where t is the month number.

The seasonal variations, using an additive model, for the sales units have been
calculated as follows:

Any month in quarter 1 +50 units
Any month in quarter 2 +15 units
Any month in quarter 3 – 5 units
Any month in quarter 4 –60 units.

If t = 1 in March of 2016, calculate the predicted sales units for November 2017.

In November 17, t = 21

Trend sales units = 1,350 + 6 × 21 = 1,476

Applying seasonal variation Y = T + S

Y = 1,476 – 60 = 1,416 units predicted

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