Skip to content

CMA Final · Strategic Cost Management · Business Forecasting Models - Time Series and Regression Analysis

A Jaipur firm finds that, for quarterly sales, the seasonal indices (average = 100) are Q1 90, Q2 110, Q3 120 and Q4 80. The deseasonalised sales in Q3 were Rs 50 lakh. What were the actual sales in Q3?

Actual Q3 sales were Rs 60 lakh. Deseasonalised figures remove the seasonal effect, so to restore it multiply by the index: 50 times 120 over 100. Dividing instead would give Rs 41.67 lakh, which reverses the adjustment.

  1. ARs 60 lakhCorrect
  2. BRs 41.67 lakh
  3. CRs 50 lakh
  4. DRs 55 lakh

Explanation

Actual = deseasonalised value x seasonal index/100 = 50 x 120/100 = 60. Rs 41.67 lakh results from dividing by 1.2, which is the deseasonalising step applied the wrong way.

Did you get it right without looking?

One question tells you little. A timed set on Business Forecasting Models - Time Series and Regression Analysis shows your real accuracy, how long you take and where you lose marks.

Practise Business Forecasting Models - Time Series and Regression AnalysisFree diagnostic mock

More Business Forecasting Models - Time Series and Regression Analysis questions