- This topic has 1 reply, 2 voices, and was last updated 8 years ago by
.
- Posts
A line of best fit has been established for the trend of sales in a business over four quarters.
The equation line is
Total sales unit = 6300 + (30*quarter number)The seasonal variation are
Quarter 1 -50
Quarter 2 +10
Quarter 3 +140
Quarter 4 -90What are the forecast sales units in quarter 5 using the addictive model?
Ans- 6450 unitsLet seasonal variation of 5th quarter be X
-50+10+130-90+X=5
X=5Total sales unit=6300+(30*5)=6450
I am not sure if i am correct or not or the steps I have this correct.
Thanks in advance 🙂There are only 4 quarters in a year!!!
Using the equation for the trend line, the trend for quarter 5 is 6300 + (30 x 5) = 6450.
Since quarter 5 is the first quarter of next year, the forecast is the trend as adjusted by the quarter 1 seasonal variation which is 6450 – 50 = 6400.
I do suggest that you watch our free lectures on this.
Our free lectures are a complete course for Paper F2 and cover everything needed to be able to pass the exam well.
- You must be logged in to reply to this topic.