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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Forecasting
Almond Ltd. had sales of $500,000 in January of 2000. It has an increasing trend in sales of $10000 per month and uses an additive model for seasonal variation. Seasonal variation is as follows.
January- March +$1000
April- June -$1000
July-September +$2000
October-December -$2000
Calculate forecasted sales for the month of December of the year 2002.
Ans) 848000
Sir, I’m getting 789000 can you explain this question?
By December 2002, there will have been 11+12+12 = 35 months of growth
Therefore the trend will have grown to 500,000 + (35 x 10,000) = 850,000.
The seasonal variation is – 2,000, therefore the forecast will be 850,000 – 2,000 = 848,000.