I need help on solving the following problem:
Ct = 4.12+0.32t
where Ct is the sales (in millions of dollars per month) of the firm and t is time measured in months from July 1994. The firm's seasonal index of sales is
Jan 81 May 137 Sept 79
Feb 98 June 122 Oct 101
march 102 July 104 Nov 74
April 76 August 101 Dec 125
construct a monthly sales forecast for the firm in 2002.
Can someone just show me the process of how to solve this problem using january as an example? Im not asking to solve for all, just one month.
2007-10-30 16:32:39 · 1 answers · asked by infiniti1113 3 in Social Science ➔ Economics
My understanding is that there are two parts to the forecast.
1. First there is the linear function that predicts the overall trend.
2. Then there is the "seasonal" index that predicts the deviations between the trend and the individual month.
Thus for July 1995, t = 12 so C(t) = 4.12 + 12 x 0.32 = 4.12 + 3.84 = 7.86
But for July the index is 104 so the forecast would be (104/100) x 7.86 = 8.1744
HTH.
2007-10-31 17:14:22 · answer #1 · answered by simplicitus 7 · 0⤊ 0⤋