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A company is forecasting sales volume using time series analysis. The following equation has been derived from past data and is considered to be a reliable predictor of future sales volume:
y = 20,000+80x
Where y is the total sales units each quarter and x is the time period (the first quarter of year 1 is time period 1).
The following set of seasonal variations for each quarter has been calculated using the additive model.
What is the forecast sales units for the second quarter of year 3?
Suggested Answer: A
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29 comments · newest first
LO
Lottie
3 months ago
What's the seasonal variation for Q2?
JA
Jacquelyne
3 months ago
True, we need to add that in.
CL
Clay
3 months ago
Don't forget the seasonal variation!
GE
Gene
3 months ago
That gives us 20,560.
LO
Lottie
4 months ago
Right, x would be 7. So, y = 20,000 + 80(7).
JA
Jacquelyne
4 months ago
We just need to find x for Q2 of year 3.
CL
Clay
4 months ago
Yeah, but the formula seems clear.
GE
Gene
6 months ago
I think it's tricky.
TI
Titus
6 months ago
I love how clear the equation is!
SE
Selma
6 months ago
Seems too simple, what if the market changes?
LE
Leonor
6 months ago
Wait, are we sure about those seasonal variations?
FR
Freeman
6 months ago
Totally agree, it's straightforward math.
RH
Rhea
6 months ago
Just plug in x=7 for Q2 of Year 3!
NI
Nida
7 months ago
Haha, I bet the answer is going to be something like "42" because that's the answer to everything, right?
DU
Dulce
7 months ago
Wait, is the second quarter of year 3 the same as the 9th quarter? I'm a bit confused on the time period.
DE
Detra
7 months ago
Okay, so we need to use the additive model to factor in the seasonal variations. This should be interesting!
RA
Raelene
7 months ago
The equation looks straightforward, but I'm not sure how to incorporate the seasonal variations.
HE
Helga
7 months ago
I recall that the formula gives us a base sales figure, but I need to make sure I apply the seasonal adjustment for Q2 properly.
AG
Agustin
7 months ago
I think I practiced a similar question where we had to adjust the forecast based on seasonal factors. I should double-check if I did it correctly.
VI
Vicky
8 months ago
I'm a bit unsure about how to apply the seasonal variations to the base forecast. Did we add or subtract those variations?
AD
Adell
8 months ago
I remember that to find the forecast for the second quarter of year 3, I need to plug in the right value for x, which should be 7.
AL
Albina
9 months ago
I'm a bit confused on how to use the seasonal variations. Do I need to multiply the equation result by the seasonal variation, or just add it? I want to make sure I get this right.
CE
Ceola
9 months ago
Okay, let me think this through step-by-step. The equation is y = 20,000 + 80x, and the time period for the second quarter of year 3 is 9. So I'll plug that in: y = 20,000 + 80(9) = 20,720. Then I need to add the seasonal variation for the second quarter, which is 1,200. So the final answer is 20,720 + 1,200 = 21,920 units.
NA
Natalie
9 months ago
I've got this! The time period for the second quarter of year 3 is 9, since the first quarter of year 1 is period 1. So I'll plug 9 into the equation: y = 20,000 + 80(9) = 20,720. Then I'll add the seasonal variation for the second quarter, which is 1,200. So the forecast sales units is 20,720 + 1,200 = 21,920.
JO
Jolene
9 months ago
Hmm, this looks tricky. I'm not sure I fully understand how to use the seasonal variations. Do I just add the value for the second quarter to the result from the equation? Or do I need to do something else?
JA
Janey
9 months ago
Okay, let's see. The question gives us the equation for forecasting sales volume, and the seasonal variations for each quarter. I think I need to plug the time period for the second quarter of year 3 into the equation, and then add the corresponding seasonal variation.
AL
Almeta
2 months ago
Don't forget to add the seasonal variation after that!
NA
Nathan
3 months ago
Right! So we plug in x = 7 into the equation.
MA
Marshall
3 months ago
I think the second quarter of year 3 is time period 7.