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Answers to supplementary objective test questions

CHAPTER 11 – FORECASTING

11.1 B

This is a multiplicative model, so seasonal variations should sum to 4, with an
average of 1 if there are four quarters.

If Y is seasonal variation for Quarter 4:

1.2 + 1.8 + 0.6 + Y = 4

Y = 4 – 3.6 = 0.4.

11.2 A

Quarter 1 Quarter 2

Seasonal component 1.2 1.8

Actual sales 110,000 125,000

Trend 91,666 69,444

Trend has decreased between Quarter 1 and Quarter 2.

11.3 D

Seasonally adjusted sales = ((5 × 16) + 60) × 1.10 = 140 × 1.1=154 units

11.4 B

In the additive model, seasonal adjustments must add to 0, so the Q4
adjustment must be – 2,200 units.

Trend sales = 9,800 + 45 × 73 = 13,085 units

Seasonally adjusted sales = 13,085 – 2,200 = 10,885 units

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