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Quarter 1. 2. 3. 4.
Seasonal variation 1.2 1.3 0.4 ?
The actual sales values for the first two quarter of 2006 were:
Quarter 1. $125,000
Quarter 2. $130,000
Using multiplicative model to forecast sales
What is the seasonal variation for the fourth quarter?
Answer
1.1
Working
X = 1.2 + 1.3 + 0.4 + X = 4
2.9 + X = 4
X = 4 – 2.9
X = 1.1
sir John I don’t understand why they did 4 – 2.9
Whoy did they used 4
Because with the multiplicative model the total of the seasonal variations should add up to 4 (or 400 if they are given in percentages, as I explain in my lectures).
In the additive model they should add up to zero. (Have you not watched my free lectures on this?)
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