Actual demand for George’s sailboats during each of the past four seasons was as

Question

Actual demand for George’s sailboats during each of the past four seasons was as in Table 4. Goergr has forecasted that annual demand for his sailboats in year 5 will equal 5,600 boats. Based on this data and the multiplicative seasonal model, determine the demand level for George’s sailboats in the spring of year 5.

Table 4

Year

Season

1

2

3

4

Winter

1400

1200

1000

900

Spring

1500

1400

1600

1500

Summer

1000

2100

2000

1900

Fall

600

750

650

500

Year

Season

1

2

3

4

Winter

1400

1200

1000

900

Spring

1500

1400

1600

1500

Summer

1000

2100

2000

1900

Fall

600

750

650

500

Explanation / Answer

Step 1: Seasonal factor is calculated

Step 2: Average seasonal factor is calculated:

Step 3:

Annual demand for year 5 = 5600 boats

Average quarterly demand for year 5 = 5600/4 = 1400 units

So,

Demand in spring of year 5 = 1.21*1400 = 1694 sailboats

Season Year 1 Seasonal factor Year 2 Seasonal factor Year 3 Seasonal factor Year 4 Seasonal factor Winter 1400 1.24 1200 0.88 1000 0.76 900 0.75 Spring 1500 1.33 1400 1.03 1600 1.22 1500 1.25 Summer 1000 0.89 2100 1.54 2000 1.52 1900 1.58 Fall 600 0.53 750 0.55 650 0.50 500 0.42 Total 4500 5450 5250 4800 Average 1125 1362.5 1312.5 1200

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