The trend forecast equation is Ŷ = 50 + 420t. The next forecast is for period 10. The typical seasonal index for period 10 is 1.25. What are the forecast sales for period 10?
A) 4,200
B) 4,250
C) 5,313
D) 1,075

Question

Quizplus · Accepted Answer

The forecast sales for period 10 is calculated by substituting t = 10 into the trend forecast equation: Ŷ = 50 + 420(10) = 4,250. Then, apply the seasonal index: 4,250 * 1.25 = 5,312.5, which rounds to 5,313.

The Trend Forecast Equation Is Ŷ = 50 + 420t