A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average demand over all months during the three-year time period was 190. What is the approximate seasonal index for July?
A) 0.487
B) 0.684
C) 1.462
D) 2.053
E) cannot be calculated with the information given

Question

Quizplus · Accepted Answer

The seasonal index for July is calculated by averaging the July values and then dividing by the overall average demand. The average for July is (110 + 150 + 130) / 3 = 390 / 3 = 130. The overall average demand is 190. Therefore, the seasonal index for July is 130 / 190 = 0.684.

A Seasonal Index for a Monthly Series Is About to Be