# Thread: Seasonal Index - Statistics(Forecasting)

1. ## Seasonal Index - Statistics(Forecasting)

Here's the problem:

The seasonal indices of the sales of garment of a particular type ina certain shop are given below,

----------Quarter -------------Seasonal Index

------------1----------------------97
------------2----------------------85
------------3----------------------83
------------4----------------------135

if the total in the first quarter of a year be worth Rs.20,000 and sales are expected to raise by 5% in each quarter, determine how much of garments of this type be kept in stock by the shop owner to meet the demand for each of three quarters of the year?

2. Originally Posted by electronic_pen
Here's the problem:

The seasonal indices of the sales of garment of a particular type ina certain shop are given below,

----------Quarter -------------Seasonal Index

------------1----------------------97
------------2----------------------85
------------3----------------------83
------------4----------------------135

if the total in the first quarter of a year be worth Rs.20,000 and sales are expected to raise by 5% in each quarter, determine how much of garments of this type be kept in stock by the shop owner to meet the demand for each of three quarters of the year?
The deseasonalised expected sales in quarter 1 are expected to be:

$\displaystyle 20000/0.97=20618.6\ (Rs)$

I will assume the question means that the deseasonalised sales will rise by
$\displaystyle 5 \%$ per quarter, so the deseasonalised sales for each quarter
will be as shown in the second column in the table below, and the
seasonalised sales (the expected sales in each quarter) are shown in the
third column:

Code:

Quarter        Deseasonalised sales          Seasonalised (expected sales)
1             20618.6                      20618.6*0.97=20000
2             20618.6*1.05=21649.5         21649.5*0.85=18402
3             21649.5*1.05=22732.0         22732.0*0.83=18867.6
4             22732.0*1.05=23868.6         23868.6*1.35=32222.6

This third column is what should be stocked to meet the expected demand.

RonL