Suppose you were forecasting sales for a firm that exhibited a cyclical pattern within each week. How would you go about forecasting sales for this firm?
A) You would need to compute day-of-the week indices centered on the seven days around each day of the week and use these indices to deseasonalize the historical observations
B) Calculate the monthly average because it automatically deseasonalizes the historical observations.
C) Ignore the seasonality.
D) Compute the daily change as a percent of sales and calculate the geometric average.

Question

Quizplus · Accepted Answer

Option A is correct because it directly addresses the cyclical pattern within each week by computing day-of-the-week indices. This method allows for the deseasonalization of historical observations by considering the specific cyclical behavior of sales on different days of the week, which is essential for accurate forecasting in this scenario.

Suppose You Were Forecasting Sales for a Firm That Exhibited