Assume that the following demands vary according a four-period seasonal cycle:
|
Month:
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
|
Demand:
|
20
|
30
|
40
|
20
|
50
|
70
|
95
|
50
|
a. Compute the seasonal indexes using the average demand in each cycle as the base.
b. Compute the seasonal indexes using regression estimates as the base.
c. How do the answers for parts a and b differ? How would you explain the difference?