The trend forecast equation is Ŷ = 100 + 120t. The next forecast is for period 8. The typical seasonal index for period 8 is 1.15. What are the forecast sales for period 8?
A) 1,060
B) 1,219
C) 960
D) 1,075

Question

Quizplus · Accepted Answer

The forecast for period 8 is calculated by substituting t = 8 into the trend equation: Ŷ = 100 + 120(8) = 1,060. Then, apply the seasonal index: 1,060 * 1.15 = 1,219.

The Trend Forecast Equation Is Ŷ = 100 + 120t