Page 225 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Answers to questions

Chapter 11

Question 1

Additive model

If an underlying trend forecasts sales of 3,000 units but there are seasonal
variations of – 600 applicable for this period along with a cyclical factor of –240
and a residual factor of +540, calculate the predicted sales units.

Y = T + S + C + R

Y = 3,000 – 600 – 240 + 540 = 2,700 units

Question 2

Multiplicative model

If an underlying trend forecasts sales of 3,000 units but there are seasonal
variations of 0.8 applicable for this period along with a cyclical factor of 0.9 and
a residual factor of 1.25, calculate the predicted sales units.

Y = T × S × C × R

Y = 3,000 × 0.8 × 0.9 × 1.25 = 2,700 units

219