Seasonal variation
Examples include a December sales peak or a weekday pattern. In an additive model the seasonal effect is expressed in units and added to the trend; in a multiplicative model it is expressed as a factor applied to the trend. Seasonal patterns can change and should be checked using relevant historical periods.
Worked example
A quarterly trend forecast is 200 units and the additive seasonal adjustment for that quarter is +30 units. The seasonally adjusted forecast is 230 units.
Common mistake
Calling a predictable annual holiday peak a long-term economic cycle, or multiplying by an additive adjustment.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |