A company uses actual demand data to develop its seasonal indices. It has the data shown below for each quarter of the previous two years. What is the seasonal index for Quarter 1?
A)0.714
B)0.750
C)1.25
D)0.732

Question

A company uses actual demand data to develop its seasonal indices. It has the data shown below for each quarter of the previous two years.  What is the seasonal index for Quarter 1?
A)0.714 
B)0.750 
C)1.25 
D)0.732

Quizplus · Accepted Answer

Year 1 average demand = (50 + 60 + 90 + 80)/4 = 70Year 2 average demand = (60 + 70 + 100 + 90)/4 = 80Quarter 1 SI for year 1 = 50/70 = 0.714. Q1 SI for year 2 = 60/80 = 0.75.Q1 average SI = 0.732.

A Company Uses Actual Demand Data to Develop Its Seasonal