ExpertMedium2 marksMultiple Choice
ACCA · Question 08 · Data analysis and statistical techniques
A seasonal ski resort uses time series analysis to forecast visitor numbers. The trend equation is Y = 5,000 + 200Q, where Q is the quarter number (Q1 2020 = 1). The resort uses a multiplicative model. The seasonal variation for Quarter 1 is +20% (or 1.20).
What is the forecasted number of visitors for Quarter 1 of 2022 (which is Q = 9)?
A seasonal ski resort uses time series analysis to forecast visitor numbers. The trend equation is Y = 5,000 + 200Q, where Q is the quarter number (Q1 2020 = 1). The resort uses a multiplicative model. The seasonal variation for Quarter 1 is +20% (or 1.20).
What is the forecasted number of visitors for Quarter 1 of 2022 (which is Q = 9)?
Answer options:
A.
6,800
B.
8,160
C.
6,820
D.
8,400
How to approach this question
First, calculate the trend value for Q=9. Then, apply the multiplicative seasonal variation (multiply the trend by 1.20).
Full Answer
B.8,160✓ Correct
Step 1: Find the trend for Q=9. Y = 5,000 + 200(9) = 5,000 + 1,800 = 6,800.
Step 2: Apply the multiplicative seasonal variation. Forecast = 6,800 * 1.20 = 8,160.
Common mistakes
Adding 20 to the trend instead of multiplying by 1.20 (confusing additive and multiplicative models).
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