The Accuweather Corporation manufacturers barometers and thermometers for weathe
ID: 1117846 • Letter: T
Question
The Accuweather Corporation manufacturers barometers and thermometers for weather forecasters. In an attempt to forecast its future needs for mercury, Accurweather's chief economist estimated average monthly mercury needs as:
N - 500 + 10X
where N= monthly mercury needs (units) and X= time period in months (January 2008= 0). The following monthly seasonal adjustment factors have been estimated using data from the past five years:
What is the unadjusted and adjusted forecast for Accuweather's mercury needs for January of 2010?
a. 740 and 851 respectively
b. 520 and 630 respectively
c. 950 and 1200 respectively
d. None of the above
Month Adjustment Factor January 15% April 10% July -20% September 5% December -10%Explanation / Answer
a. 740 and 851 respectively
Reason
At first, we calculate the number of months in Jan 2010, it is 24 as it starts from Jan 2008. Thus N=500+24x10=740
Now, with adjustment factor of 15%, it can go upto 740x1.15=851
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