Exhibit 18.4.The following ratio-to-moving averages for the seasonally adjusted series were found by the decomposition method applied on a time series representing quarterly sales for the last four years: Refer to Exhibit 18.4.If the trend is described by the trend line ,what is the forecast for the fourth quarter of this year?
A)2049.22
B)1519.95
C)1600.00
D)2171.36

Question

Exhibit 18.4.The following ratio-to-moving averages for the seasonally adjusted series were found by the decomposition method applied on a time series representing quarterly sales for the last four years:  Refer to Exhibit 18.4.If the trend is described by the trend line  ,what is the forecast for the fourth quarter of this year?
A)2049.22 
B)1519.95 
C)1600.00 
D)2171.36

Quizplus · Accepted Answer

To forecast the fourth quarter of this year, we need to multiply the last value of the seasonal index by the trend value and divide by the last seasonal index. 
Using the given ratio-to-moving averages, the seasonal index for the fourth quarter is 1.1643 (last value of the ratio-to-moving averages). The trend value is given by the trend line as 1856.31. 
Thus, the forecast for the fourth quarter of this year is: 
(1.1643 x 1856.31) / 1 = 2171.36 
Hence, the correct answer is D.