Use the following information to answer questions 29 and30: Trendprojection is u

Question

Use the following information to answer questions 29 and30:

Trendprojection is used to predict quarterly demand for a product. Datastarting with quarter 1 of year 2007 was used to generate thefollowing trend equation: Y = 250 - 2.5t. Seasonal (quarterly)indices are also computed: Quarter 1 = 1.5; Quarter 2 = 0.8;Quarter 3 = 1.1; and Quarter 4 = 0.6.

21) What is the seasonally-adjusted forecast for quarter 2 of2009 (rounded to the nearest integer)?

a.       188

b.      180

c.       256

d.      245

22) What is the seasonally-adjusted forecast for quarter 4 of2009?

a.       140

b.      189

c.       138

d.      132

Explanation / Answer

Seasonal adjustments: The final step in developing the forecast when both trend andseasonal components are present is to use the seasonal index toadjust the deseasonalized trend projection. The qurterly forecast is obtained by multiplying thedeseasonalized forecast based on trend by the seasonal index so the sesonally-adjusted forecast for quarter 2 of 2009 is180*0.8=144. and the seasonally-adjusted forecast for quarter 4 of 2009 is132*0.6 is 79.2

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