ACCA MA · Chapter 2 · Question 8 of 12
Quarterly sales trend is given by y = 200 + 5t, where t is the quarter number. Quarter 21 is a first quarter, which has a multiplicative seasonal index of 1.10. What is the forecast sales figure for quarter 21?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 335.5
Explanation
Trend for t = 21: 200 + (5 x 21) = 305. Under the multiplicative model the forecast = trend x seasonal index = 305 x 1.10 = 335.5. Dividing by 1.10 (277.3) would deseasonalise rather than forecast, and 330.0 uses t = 20 by mistake.
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