The trend forecast equation is Ŷ = 100 + 120t. The next forecast is for period 11. The typical seasonal index for period 11 is 1.25. What are the forecast sales for period 11?
A) 1,420
B) 1,775
C) 1,320
D) 1,075

Question

Quizplus · Accepted Answer

To calculate the forecast sales for period 11, we need to use the trend forecast equation and multiply it by the seasonal index for that period:
Ŷ = 100 + 120t 
Ŷ11 = 100 + 120(11)
Ŷ11 = 1,420

Then, we need to multiply this result by the seasonal index:
Ŷ11 x 1.25 = 1,775
Therefore, the forecast sales for period 11 are 1,775, which is option B.

The Trend Forecast Equation Is Ŷ = 100 + 120t