3. George Kyparisis owns a company that manufactures sailboats. Actual demand fo

Question

3. George Kyparisis owns a company that manufactures sailboats. Actual demand for George's sailboats during each of the past four seasons was as follows YEAR 2 SEASON Winter Spring Summer 1,000 2,100 Fall 1,000 900 1,600 1,500 1,900 500 1,400 1,200 1,500 1,400 2,000 650 George has forecasted that annual demand for his sailboats in year 5 will equal 5,600 600 750 sailboats. Based on this data and the multiplicative seasonal model, what will the demand level be for George's sailboats in the spring of year 5?

Explanation / Answer

1250

Average demand over all seasons = 1250

Average over spring demand = 1500

Average demand for each season = 5600/4 = 1400

Spring Index = Average spring demand/Average demand over all seasons = 1.2

Spring Demand = 1.2*1400 = 1680 units

Year Season 1 2 3 4 Year 5 Avg Winter 1400 1200 1000 900 1125 Spring 1500 1400 1600 1500 1500 Summer 1000 2100 2000 1900 1750 Fall 600 750 650 500 625 TOTAL 4500 5450 5250 4800 5000 Average 1125 1362.5 1312.5 1200

1250

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