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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
Calculate forecasted sales for the month of December of the year 2002.
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.