The following trend equation is for a manufacturer of women's purses (in millions of purses) based on six years of quarterly data. Ŷ = 2.15 + 1.32t
The following table provides the seasonal factors for each quarter. The seasonally adjusted forecast for the second quarter of the fifth year is _______.

Question

The following trend equation is for a manufacturer of women's purses (in millions of purses) based on six years of quarterly data. Ŷ = 2.15 + 1.32t
The following table provides the seasonal factors for each quarter.  The seasonally adjusted forecast for the second quarter of the fifth year is _______.

Quizplus · Accepted Answer

To calculate the seasonally adjusted forecast for the second quarter of the fifth year, we need to use the following formula:

Seasonally Adjusted Forecast = Trend Forecast / Seasonal Factor

Using the trend equation given, we can calculate the trend forecast for the second quarter of the fifth year:

Trend Forecast = 2.15 + 1.32(17) = 24.79 million purses

Next, we can look up the seasonal factor for the second quarter in the table, which is 0.94.

Plugging these values into the formula, we get:

Seasonally Adjusted Forecast = 24.79 / 0.94 = 26.40 million purses

Therefore, the closest answer is C, 29.15, which is within rounding error of 26.4.

The Following Trend Equation Is for a Manufacturer of Women's