1. George Kyparisis owns a company that manufactures sailboats. Actual demand fo
ID: 398656 • Letter: 1
Question
1. 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
Season
1
2
3
4
Winter
1,200
1,400
900
800
Spring
1,500
1,500
1,700
1,500
Summer
900
2,100
2,000
2,000
Fall
500
750
700
500
George has forecasted that annual demand for his sailboats in year 5 will equal 5,600 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?
Year
Season
1
2
3
4
Winter
1,200
1,400
900
800
Spring
1,500
1,500
1,700
1,500
Summer
900
2,100
2,000
2,000
Fall
500
750
700
500
Explanation / Answer
(a) (b) (c) (d) (e) (f) Season 1 2 3 4 Average yearly Demand [(a)+(b)+(c)+(d) /4] Average Monthly Demand (4,988/4) Seasonal index [(e)/(f)] Winter 1,200 1,400 900 800 1,075 1,247 0.9 Spring 1,500 1,500 1,700 1,500 1,550 1,247 1.2 Summer 900 2,100 2,000 2,000 1,750 1,247 1.4 Fall 500 750 700 500 613 1,247 0.5 4,988 Forecasted Annual demand for year 5 = 5,600 Demand level for George's sailboats in the spring of year 5 = (Annual Demand/4) X Seasonal index = (5,600/4) X 1.2 = 1,680 Sailboats
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