QUESTION 10 1 points Save Answer Consider a seasonality model, such as the one f

Question

QUESTION 10 1 points Save Answer Consider a seasonality model, such as the one for the Edmonton International Airport that was modelled in the lab, in which average seasonal indexes are computed for each month of the year. Now consider that it is later found that the demand number used for July 2011 was incorrect, and the actual demand value was higher than the number used in the model. If the number used in the model is corrected, what should happen to the updated average seasonal indexes? a. The average seasonal index value for July will decrease while the average seasonal index values for all other months will increase b. The average seasonal index value for July will increase while the average seasonal index values for all other months will not change. c. The average seasonal index values for all months will decrease. d. The average seasonal index value for July will increase while the average seasonal index values for all other months will decrease e. The average seasonal index value for July will decrease while the average seasonal index values for all other months will not change f. The average seasonal index values for all months will increase

Explanation / Answer

Answer. d. Seasonal index= Avg demand for the season/ Avg demand of the total period.

Since the july demand number increases, hence the Avg demand of the total period will increase.

Since denominator increases, the avg seasonal index for all other months except July will decrease.

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