Page 230 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Chapter 12

Question 7

Seasonal variation

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

Sales units = 990 + 19t where t is the quarter number.

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

Quarter 1 95%
Quarter 2 85%
Quarter 3 120%
Quarter 4 100%.

If t = 1 in quarter 1 of 2016, calculate the predicted sales units for quarter 3 of
2018.

In Q3 2018, t = 11

Trend sales units = 990 + 19 × 11 = 1,199

Applying seasonal variation Y = T × S

Y = 1,199 × 120% = 1,439 units predicted

224