i. Using the ratio-to-moving-average method, dividing the actual sales for a month by the typical seasonal for that month results in a figure that includes only trend, cycle and irregular fluctuations. This procedure is called deseasonalizing the sales. ii. The reason for deseasonalizing a sales series is to remove trend and cyclical fluctuations so that we can study seasonal fluctuations.
iii. Knowing the seasonal pattern in the form of indexes allows the retailer to deseasonalize sales.
A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question

Quizplus · Accepted Answer

The ratio-to-moving-average method is used for deseasonalizing data, which involves removing the seasonal component to analyze the trend, cycle, and irregular fluctuations, making statement (i) correct. Statement (iii) is also correct because knowing the seasonal pattern helps in the deseasonalization process. However, statement (ii) is incorrect because the purpose of deseasonalizing is to remove the seasonal fluctuations, not the trend and cyclical fluctuations, to better analyze the underlying trend and cycle.

I Using the Ratio-To-Moving-Average Method, Dividing the Actual Sales for a Month