Question
In: Finance
The following equation summarizes the trend portion of quarterly sales of condominiums over a long cycle....
The following equation summarizes the trend portion of quarterly
sales of condominiums over a long cycle. Sales also exhibit
seasonal variations.
Ft = 53 − 4.3t + 3.3t
2
where
Ft = Unit sales
t = 0 at the first quarter of last year
| Quarter | Relative |
| 1 | 1.05 |
| 2 | 1.05 |
| 3 | .55 |
| 4 | 1.35 |
Using the information given, prepare a forecast of sales for each
quarter of next year (not this year), and the first quarter of the
year following that. (Round intermediate calculations and final
answers to 2 decimal places.)
| Quarter | Forecast |
| 1 | |
| 2 | |
| 3 | |
| 4 | |
| 1 | |
Solutions
Expert Solution
t = 0 represents Q1 of last year. Please see the table below. Please see the second row that explains the mathematics. We have to forecast Ft for 4 quarters of next year and 1 quarter of the following year. "t" corresponding to these periods is from t = 8 to t = 12.
Your answers are:
| Quarter | Forecast |
| 1 | 293.55 |
| 2 | 342.00 |
| 3 | 207.00 |
| 4 | 658.80 |
| 1 | 614.65 |
Please see the sequence below for further understanding. Cells highlighted in yellow are your answer.
| Year | Quarter | t | Forecast Without Seasonality | Relative/Seasonal Index | Forecast With Seasonality |
| Ft= 53 − 4.3 x t + 3.3 x t2 | R | R x Ft | |||
| Last year | 1 | 0 | 53.00 | 0.95 | 61.75 |
| 2 | 1 | 52.00 | 0.9 | 57.60 | |
| 3 | 2 | 57.60 | 0.45 | 32.40 | |
| 4 | 3 | 69.80 | 1.2 | 106.80 | |
| This year | 1 | 4 | 88.60 | 0.95 | 109.25 |
| 2 | 5 | 114.00 | 0.9 | 135.00 | |
| 3 | 6 | 146.00 | 0.45 | 87.30 | |
| 4 | 7 | 184.60 | 1.2 | 296.40 | |
| Next Year | 1 | 8 | 229.80 | 0.95 | 293.55 |
| 2 | 9 | 281.60 | 0.9 | 342.00 | |
| 3 | 10 | 340.00 | 0.45 | 207.00 | |
| 4 | 11 | 405.00 | 1.2 | 658.80 | |
| Year after | 1 | 12 | 476.60 | 0.95 | 614.65 |
jeff jeffy answered 8 months agoRelated Solutions
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where
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