Exercise 2:The Patio, Inc. company manufactures patio furniture. From experience, you know that demand is seasonal, that is, there is a greater amount of demand for products in specific periods throughout a year of operations. In order to properly plan its production for the next year, the furniture sales (in units) for the previous two years were reviewed: 20X320X4Seasonal indexAverage seasonal index20X5First quarter (Jan-Feb-Mar)94,700103,500¿?¿?¿?Second Quarter (Apr-May-Jun)116,000126,100¿?¿?¿?Third quarter (Jul-Aug-Sep)152,500166,200¿?¿?¿?Fourth quarter (Oct-Nov-Dec)101,22590,000¿?¿?¿?Use the multiplicative seasonal method to make a forecast for the year 20X5 based on the sales force estimate, which determined that the demand for furniture will be 15% higher than in the year 20X4.Calculate the average number of units sold per station.Calculate the seasonal index.Calculate the average seasonal index.Calculate demand per quarter.Discuss any observed seasonal patterns or variations in estimated demand values.Interpret the results obtained and their implications for demand forecasting.

Here, I will determine the average seasonal index for each quarter,

Answered: Calculate the average number of units…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section: Chapter Questions

Problem 40P: The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels....

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Exercise 2:

The Patio, Inc. company manufactures patio furniture. From experience, you know that demand is seasonal, that is, there is a greater amount of demand for products in specific periods throughout a year of operations. In order to properly plan its production for the next year, the furniture sales (in units) for the previous two years were reviewed:

	20X3	20X4	Seasonal index	Average seasonal index	20X5
First quarter (Jan-Feb-Mar)	94,700	103,500	¿?	¿?	¿?
Second Quarter (Apr-May-Jun)	116,000	126,100	¿?	¿?	¿?
Third quarter (Jul-Aug-Sep)	152,500	166,200	¿?	¿?	¿?
Fourth quarter (Oct-Nov-Dec)	101,225	90,000	¿?	¿?	¿?

Use the multiplicative seasonal method to make a forecast for the year 20X5 based on the sales force estimate, which determined that the demand for furniture will be 15% higher than in the year 20X4.

Calculate the average number of units sold per station.
Calculate the seasonal index.
Calculate the average seasonal index.
Calculate demand per quarter.
Discuss any observed seasonal patterns or variations in estimated demand values.
Interpret the results obtained and their implications for demand forecasting.

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