The ratios of "actuals to moving averages" (seasonal indexes)for a time series are presented in the following table as percentages: The initial estimate of the seasonal index for Q₁ is ___. A)111.047 B)111.741 C)111.523 D)111.243 E)111.943

Question

Quizplus · Accepted Answer

To calculate the initial estimate of the seasonal index, we need to take the average of all the ratios for the given season. For Q₁, the ratios are 103%, 110%, 116%, and 104%. The average of these ratios is (103+110+116+104)/4 = 108.25%. We then need to adjust this estimate to make sure the average of all the seasonal indexes is equal to 100%. To do this, we divide each seasonal index by the average of all the indexes and multiply by 100. In this case, the sum of all the ratios is 433%, so we divide each ratio by 4.33 to get the adjusted estimate. For Q₁, the adjusted estimate is (108.25/4.33)*100 = 111.523%. Therefore, the answer is C.

The Ratios of "Actuals to Moving Averages" (Seasonal Indexes)for a Time