Question

Quarterly sales of flowers at a wholesaler are as follows:

Year	Quarter	Sales ($000)	Year	Quarter	Sales ($000)
1	I	98	3	I	138
	II	106		II	130
	III	109		III	147
	IV	133		IV	141
2	I	130	4	I	144
	II	116		II	142
	III	133		III	165
	IV	116		IV	173

Forecast quarterly sales for year 5 based on static method of forecasting assuming the mixed relationship exists among the variables (with trend and level have an additive relationship and these two have a multiplicative relationship with the seasonal factor).

Answer 1

Solution:

The table below shows the forecast including the trend element for year 5. The forecast is used as per the static method, which means taking the actual values of the previous period as the base value for the forecast. These values are then multiplied by their respective seasonality indices and we get the corresponding forecast for the period.

Sales ($000) Quarter — Y1 Sales Y2 Sales Y3 Sales Y4 Sales ($000) ($000) ($000) ($000) 98 130 138 144 106 116 130 142 109 133 147 165 133 116 141 173 Y5 Sales Forecast 138.43 132.54 171.91 II III IV 183.97 Average 111.5 123.75 139 156 Quarter Seasonality Index - Y1 Sales ($000) 0.88 0.95 0.98 1.19 Y2 Sales ($000) 1.05 0.94 1.07 Y3 Sales ($000) 0.99 0.94 1.06 1.01 Y4 Sales ($000) 0.92 0.91 1.06 1.11 II 0.96 0.93 1.04 1.06 IV 0.94