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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 3 years ago by John Moffat.
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  • January 23, 2022 at 9:18 am #647306
    laraib.abro
    Member
    • Topics: 11
    • Replies: 3
    • ☆

    Sir In text book there is a particular paragraph in disadvantage of time series that seasonal variations are constant.

    My question is whether seasonal variations are constant or not .

    January 23, 2022 at 9:31 am #647312
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54702
    • ☆☆☆☆☆

    They are very unlikely to be constant. If sales are increasing then the seasonal variations are likely to increase also when using the additive model. The multiplicative model would be better in this situation, but even then the variations are unlikely to be constant. That is why in both cases we calculate the average seasonal variations.

    Do watch my free lectures on this where I explain. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.

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