1.
You are the sales manager for Tom Turkey Farms, which is a major
producer of turkey food products. Discuss the reasons why you might
prefer to use time-series decomposition to generate sales forecasts. In

your answer address each aspect of the time-series decomposition
procedure.

1.
Consider the following sales data measured in millions of dollars:
Period
Time Index
1999Q1
1
1999Q2
2
1999Q3
3
1999Q4
4
2000Q1
5
2000Q2
6
1.
a) Find a four-period moving average for each quarter.

1.
b) Find the centered moving averages for the sample.

1.
c) Find the seasonal factors for Q3 and Q4 of 1999? Can you find the
seasonal factor for 2000Q1?

Seasonal factors of Q3 and Q4 of 1998 are found as follows:
SFt = Yt/CMAt.

Accordingly, our Q3 and Q4 seasonal factors are:
PERIOD
SEASONAL FACT
1999Q3
20/15.5 = 1.29
1999Q4
12/15.75 = 0.76
These factors suggest that sales are above the yearly average in Q3 and
below the yearly average in Q4.
Note that since these factors are calculated based upon data for Q3 and Q4 of
1999, they must be smoothed with similar estimates from other periods to
calculate the Q3 and Q4 seasonal index numbers.
1.
Quarter 3 seasonal factors for sales of Gerber baby foods were reported
to be:
YEAR
SEASONAL FACT
1996
1.25
1997
1.13
1998
1.03
1999
1.32
2000
1.24
1.
a) What is the unadjusted seasonal index for Q3 sales?