Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 0.8. What is the seasonally-adjusted sales forecast for January?
A) 640 units
B) 798.75 units
C) 801.25 units
D) 1000 units
E) 83.33 units

Question

Quizplus · Accepted Answer

The seasonally adjusted sales forecast for January can be calculated as: January forecasted demand * January seasonal index.
January forecasted demand = yearly forecasted demand / 12 = 800/12 = 66.67 units
Seasonally adjusted sales forecast for January = 66.67 * 0.8 = 53.33 units
Therefore the correct answer is A, which is closest to 53.33 units.

Demand for a Certain Product Is Forecast to Be 800