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Assume you collected a quarterly sales data (in millions of dollars) over a four-year period from the first quarter 2016 to the fourth quarter 2019, and computed the seasonal index for each quarter. If (actual) sales were 221 in the fourth quarter of 2018 and the (normalised) seasonal index for the fourth quarter was 0.98, what is the deseasonalised sales value (in millions of dollars) in the fourth quarter of 2018? Round your answer to two decimal places.

Question

Assume you collected a quarterly sales data (in millions of dollars) over a four-year period from the first quarter 2016 to the fourth quarter 2019, and computed the seasonal index for each quarter. If (actual) sales were 221 in the fourth quarter of 2018 and the (normalised) seasonal index for the fourth quarter was 0.98, what is the deseasonalised sales value (in millions of dollars) in the fourth quarter of 2018? Round your answer to two decimal places.

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Solution

To calculate the deseasonalised sales value, you need to divide the actual sales by the seasonal index.

Here are the steps:

  1. Convert the seasonal index into a decimal. In this case, the seasonal index is already in decimal form (0.98).

  2. Divide the actual sales by the seasonal index.

So, the calculation would be:

221 (actual sales) ÷ 0.98 (seasonal index) = 225.51

Therefore, the deseasonalised sales value for the fourth quarter of 2018 is approximately $225.51 million (rounded to two decimal places).

This problem has been solved

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