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Seasonal Variations

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Seasonal Variations

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • January 5, 2022 at 1:05 pm #645343
    sarbrina
    Participant
    • Topics: 22
    • Replies: 49
    • ☆☆

    Hi Mr. John,

    This question uses the multiplicative model and it is pretty straight forward, however i just want to know how to arrive at the answer if we had to use the additive model (If it is even possible).

    In a time series analysis, the multiplicative model is used to forecast sales and the following seasonal variations apply:
    Quarter 1 2 3 4
    Seasonal variation 1.2 1.3 0.4 ?

    The actual sales values for the first two quarters of 2006 were:
    Quarter 1: $125,000
    Quarter 2: $130,000

    What is the seasonal variation for the fourth quarter?
    A –2.9
    B 0.9
    C 1.0
    D 1.1

    January 5, 2022 at 2:46 pm #645353
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51543
    • ☆☆☆☆☆

    The variations have been given as multiplicative. We cannot therefore use the additive model.

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