Problem 3-18 New car sales for a dealer in Cook County, Illinois, for the past y

Question

Problem 3-18 New car sales for a dealer in Cook County, Illinois, for the past year are shown in the following table, along with monthly indexes (seasonal relatives), which are supplied to the dealer by the regional distributor. 0.90 1.10 1.20 120 1.20 1.25 Jul 0.70 0.80 Aug.805 0.60 Sept. 848 0.94 Oct. 827 793 Jan 645 Feb. 644 Mar 630 Apr. 783 May 722 Jun 813 0.89 Nov. 843 1.00 Dec. 785 b. Deseasonalize car sales. (Round your answers to the nearest whole number) Deseasonalized Month Jul Jan Aug. FebSep. Mar AprNov May Jun Oct e. What action might management consider based on your findings in part b? Advertising and sales promotions because the deasonalized data displays a downward trend Increase inventory because the deasonalized data displays an upward trend References eBook & Resources

Explanation / Answer

Ans:

Formula to deseasonalize = Units sold / Index

1) Table showing deseasonalized car sales.

2) Advertising and sales promotions because the deasonalized data displays a downward trend.

Based on the deasonalized data we can see a downward trend.Hence in order to increase sales management should focus on sales promotion.

Month Deseasonalized Month Deseasonalized Jan 922 Jul 882 feb 805 Aug 732 Mar 1050 Sep 707 Apr 833 Oct 690 May 812 Nov 703 Jun 813 Dec 628

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