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The trend of a product has been calculated as a decrease in sales of 2 units/quarter
and seasonal variation of Q4 = -15
Sales for Q4 2017 is 320 units
using additive model what is predicted sales for Q4 2018 ?320 + (- 2* 4 quarter) + (-15) = 297 units
but answer says 312If you have typed it all out correctly then it seems that the answer is 297 units.
Does the answer in your book not show the workings also?
My mistake – the answer is correct.
If the actual sales in Q4 2017 were 320, then because there is a seasonal variation of -15, the trend would be 320 + 15 = 335.
Therefore for Q4 2018, the forecast is 335 – (4×2) – 15 = 312
but that seasonal variation is what we are adjusting at the end isnt it ? why adjust it twice ?
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