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Qn1) The trend for monthly sales ($Y) is related to the month (t) by the equation Y = 1,500 – 3t where t = 1 in the first month of 20X8. What are the forecast sales (to the nearest dollar) for the first month of 20X9
if the seasonal component for that month is 0.92 using a multiplicative model?Answer: 0.92*1461(calculated trend)
Qn2) Unemployment numbers actually recorded in a town for the second quarter of the year 2000 were
4,700. The underlying trend at this point was 4,300 people and the seasonal factor is 0.92. Using the
multiplicative model for seasonal adjustment, what is the seasonally-adjusted figure (in whole numbers)
for the quarter?Answer : 4700/0.92= 5109
My problem: In question 2 isn’t the seasonally adjusted figure the sales forecast?
Is this the same as taking trend*seasonal component to get the forecast sales just like done in qn1?
However there already is a record of the actual unemployment. I’m so confused , why isnt the second qn solved as the first one, and is there any difference in what the 2 Qns are asking us to find. also why is 4700 divided by the seasonal factor.Help needed,
kindly
sukainaIn the first question we are forecasting what the actual sales will be in the first month of 20X9, and because of the seasonality we will expect them to be lower than the trend.
In the second question we know what the actual unemployment is in the second quarter of 2000 and we also know that we expect them to be lower because of the seasonality. The question is asking what the unemployment would have been if we remove the seasonality.
(And the second one is very relevant in real life. Governments publish unemployment numbers regularly and if the number of unemployed falls they like to say that it is because their policies are working well. However if there is seasonality and numbers always are lower in a particular month, then they should remove the seasonality and look at whether numbers are higher or lower if there was not the seasonality.)
ok I now I understand the difference in the two questions but:
for the second question if we are finding what the unemployment would have been if we removed the seasonality wouldn’t that be the Trend?
Also when we take the seasonal factor and multiply with the trend to get the actual unemployment the answer is (0.92*4300)= 3956. So how is 4700 right in the first place? or is it just because there maybe other factors that may be influencing the actual unemployment?
I’m sorry for the trouble :/
There can be other factors. Also the trend is only for forecasting but here we know the actual outcome.
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