Page 189 - P1 Integrated Workbook STUDENT 2018

Forecasting

Example 5

Jayco knows that it has the following trend for monthly sales of its earplugs:

Trend sales = 500 + 2m where m is the month number, a number that goes up
by 1 every month.

The value of m in December 20X5 was 250

Jayco also has the following seasonal variations:

Jan-Mar + 50 boxes

Apr-Jun – 30 boxes

Jul-Sep – 40 boxes

Oct-Dec + 20 boxes

What would be the predicted number of boxes sold in March 20X7?

Solution

Trend = 500 + 2m

Calculate m for March 20X7:

250 + 15 months at 1 per month = 265

Calculate trend sales:

500 + (2 × 265) = 1,030 boxes

Apply seasonal variation for March of + 50 boxes

Prediction = T + S

Prediction = 1,030 + 50 = 1,080 boxes

185