The GNP for each quarter of 2001-2004 is shown in the following table. An analys

Question

The GNP for each quarter of 2001-2004 is shown in the following table. An analyst of Wall Street bank wants to use the multiplicative Time Series decomposition method to forecast GNP for year 2005. He has computed the Trend model and the Seasonal Index using the data. The details are as follows:? Trend model is “Y=8550.8+112.48X, where Y is the GNP and X is is the time period” Seasonal Index is ” Quarter 1=0.985, Quarter 2=0.995, Quarter 3=1.003, Quarter 4=1.017” Calculate the GNP forecast for year 2005 using seasonal forecast (Trend *Seasonal index) method. What is the GNP forecast for the Quarter 1 of year 2005?

Explanation / Answer

From the above table , GNP forecast for the 1st quarter 1 of 2005 year is at 0.99 is 8575.

Quarter Forecast Total S.I I 8661.593 8662 0.99 II 8662.718 8663 0.99 III 8663.617 8664 1 IV 8665.192 8665 1 34654 Average forcast 8663.5

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