In a time series with quarterly sales data,assume that the seasonal index for the summer quarter has been found to be 0.87,this can be interpreted to mean that sales tend to be 87 percent higher in the summer quarter when compared to the other quarters.

Question

Quizplus · Accepted Answer

The seasonal index of 0.87 for the summer quarter does not mean that sales are 87% higher in the summer quarter compared to the other quarters. It means that the sales in the summer quarter are estimated to be 13% lower than the average sales for all quarters. This is because the seasonal index is calculated by taking the average sales for the summer quarter and dividing it by the average sales for all quarters. Therefore, the correct interpretation would be that sales in the summer quarter tend to be 13% lower than the average sales for all quarters.

In a Time Series with Quarterly Sales Data,assume That the Seasonal