Demand for roses in Great Lakes Roses has trend and seasonal components. Seasonal relatives $\mathrm{Q}_{\mathrm{w}}, \mathrm{Q}_{\mathrm{sp}}$, $\mathrm{Q}_{\mathrm{su}}, \mathrm{Q}_{\mathrm{f}}$ are respectively 0.2, 1.3, 1.7.and 0.8. The trend line is estimated to be $\mathrm{y}_{\mathrm{t}}=1500+200 t$, where $\mathrm{t}$ is the quarter number. Starting with $t=1$ for Winter 2004, when Great Lakes Roses opened its doors, the seasonally adjusted forecast for Fall 2005 would be

Question

Quizplus · Accepted Answer

The seasonally adjusted forecast for Fall 2005, which is $t=8$ (since we start with Winter 2004 as $t=1$, and each year has 4 quarters), is calculated using the trend line equation $y_t = 1500 + 200t$. Substituting $t=8$ gives $y_t = 1500 + 200(8) = 3100$. To adjust for the seasonal component of Fall ($Q_f = 0.8$), we multiply the trend forecast by the seasonal relative: $3100 \times 0.8 = 2480$.

Demand for Roses in Great Lakes Roses Has Trend and Seasonal