The Westberg Electric Company sells electric motors. The monthly trend equation, based on four years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of March is 100. Determine the seasonally adjusted forecast for March of the fifth year.

Question

Quizplus · Accepted Answer

The seasonally adjusted forecast for March of the fifth year is calculated by first determining the forecast without the seasonal adjustment and then applying the seasonal factor. The time period t for March of the fifth year is 4 years * 12 months/year + 3 months = 51 months. Using the trend equation Y' = 4.4 + 0.5t, we substitute t = 51 to get Y' = 4.4 + 0.5(51) = 4.4 + 25.5 = 29.9. Since the seasonal factor for March is 100, which means there is no adjustment (a factor of 100 indicates the actual value is exactly as forecasted without any seasonal variation), the seasonally adjusted forecast remains 29.9.

The Westberg Electric Company Sells Electric Motors