Question 1

A cross-border logistics company uses an additive time series model to forecast shipping volumes. The trend equation is T = 5,000 + 200Q (where Q is the quarter number, starting with Q=1 for Q1 20X1). The seasonal variation for Quarter 3 is +450.

What is the forecast for shipping volumes in Quarter 3 of 20X2 (Q=7)?

Accepted Answer

1. Calculate the trend value by substituting Q=7 into the equation. 2. Add the seasonal variation for Q3 to the trend value.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Using a multiplicative model (multiplying by 1.045) instead of additive, or miscounting the quarter number.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 4

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