Question:
Part (a):
The quarterly earnings (in millions of dollars) of a large textile manufacturing company have been recorded for the years 2010-2013. These data are shown in the following table.
Quarter 2010 2011 2012 2013
1 52 57 60 66
2 67 75 77 82
3 85 90 94 98
4 54 61 63 67
Using a four-quarter centred moving average, measure the quarterly variation by calculating the seasonal (quarterly) indexes. Use these to obtain the seasonally adjusted earnings for each of the 16 quarters.
Part (b):
The following trend line and seasonal indexes were calculated from six years of quarterly observations:
Trend line: y^(t) = 2000 + 80t - 2(02) Seasonal indexes:
Quarter Seasonal Index
1 0.6
2 0.9
3 1.1
4 1.4
Forecast the four quarterly values for next year.