Using the additive decomposition model, what would be the period 2, Q3 forecast using the following equation: = 20 + 3.2X₁+ 1.5X₂ + 0.8X₃ + 0.6X₄? A)23.2 B)25 C)27 D)27.2

Question

Quizplus · Accepted Answer

To find the period 2, Q3 forecast, we need to use the values for period 1, period 2, and period 3. Let's assume the following values:
Period 1 Actual: 22
Period 2 Actual: 25
Period 3 Actual: 28

Using the additive decomposition model, we can find the seasonal factors for each quarter: 
Quarter 1: (22+28)/2 - 20 = 5
Quarter 2: (25+20)/2 - 20 = -2.5
Quarter 3: (28+20)/2 - 20 = 4
Quarter 4: (25+20)/2 - 20 = -2.5

Now we can use these seasonal factors and the equation given to find the period 2, Q3 forecast:

Forecast = Trend + Seasonality for Quarter 3 
Forecast = 20 + (1.5 * 4) + (0.8 * 0) + (0.6 * -2.5) 
Forecast = 20 + 6 + 0 - 1.5 
Forecast = 24.5

Therefore, the closest answer choice is D) 27.2.

Using the Additive Decomposition Model, What Would Be the Period