ExpertMedium2 marksMultiple Choice
ACCA · Question 05 · Forecasting Techniques
Section A
TransGlobal Logistics uses time series analysis to forecast shipping volumes. The underlying trend is calculated using a 4-quarter centered moving average. If the actual shipping volume for Quarter 3 was 12,500 TEUs (Twenty-foot Equivalent Units) and the centered moving average trend value for that quarter was 11,800 TEUs, what is the seasonal variation for Quarter 3 using the additive model?
Section A
TransGlobal Logistics uses time series analysis to forecast shipping volumes. The underlying trend is calculated using a 4-quarter centered moving average. If the actual shipping volume for Quarter 3 was 12,500 TEUs (Twenty-foot Equivalent Units) and the centered moving average trend value for that quarter was 11,800 TEUs, what is the seasonal variation for Quarter 3 using the additive model?
Answer options:
A.
-700 TEUs
B.
+700 TEUs
C.
1.06
D.
24,300 TEUs
How to approach this question
Use the additive time series formula: Actual = Trend + Seasonal Variation. Rearrange to find Seasonal Variation: Actual - Trend.
Full Answer
B.+700 TEUs✓ Correct
In an additive time series model, the seasonal variation is the difference between the actual result and the trend. SV = Actual - Trend = 12,500 - 11,800 = +700 TEUs.
Common mistakes
Subtracting actual from trend (resulting in -700) or using the multiplicative model.
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