A company has developed a linear trend regression model based on 16 quarters of data.The independent variable is the measure of time (t = 1 thru 16 where quarter 1 is winter quarter,2 is spring,etc. ).The company has also developed seasonal indexes for each quarter as follows: The linear trend forecast equation is: = 120 + 56t.
Given this information,what is the seasonally adjusted forecast for period 19?
A)1,064
B)1,184
C)828.80
D)986.7

Question

A company has developed a linear trend regression model based on 16 quarters of data.The independent variable is the measure of time (t = 1 thru 16 where quarter 1 is winter quarter,2 is spring,etc. ).The company has also developed seasonal indexes for each quarter as follows:  The linear trend forecast equation is:  = 120 + 56t.
Given this information,what is the seasonally adjusted forecast for period 19?
A)1,064 
B)1,184 
C)828.80 
D)986.7

Quizplus · Accepted Answer

To calculate the seasonally adjusted forecast for period 19, we first need to calculate the seasonal index for the winter quarter (period 19).

Using the provided seasonal indexes, we can see that the winter quarter (period 1, 5, 9, 13, 17, etc.) has a seasonal index of 0.80. Therefore, the seasonally adjusted forecast for period 19 would be:

Seasonally adjusted forecast = Linear trend forecast * Seasonal index
Seasonally adjusted forecast = (120 + 56(19)) * 0.80
Seasonally adjusted forecast = 828.80

Therefore, the answer is C) 828.80.

A Company Has Developed a Linear Trend Regression Model Based