Question

A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average demand over all months during the three-year time period was 190. What is the approximate seasonal index for July________________.

Answer 1

0.684.

Step-by-step explanation:

The seasonal index is measure to determine a data for a future season or predict approx future values. It will help determine a season’s index through cycle with average season of that cycle.

The approximate seasonal index for July will be calculated from formula given below,

Average demand of July / Average demand during 3 year time period.

To determine Average demand of July: (110 + 150 + 130) / 3

Average demand of July = 130.

Seasonal index for July = 130 / 190

Seasonal index for July = 0.684.