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Seasonal Indexes: Multiplicative Model

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The monthly sales volume (in thousands of dollars) for a manufacturer of snow skis is seasonal (there tend to be more skis sold during fall and winter months than during warmer months). The following table shows the monthly seasonal indexes for the company's sales:

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
1.17 1.03 0.90 0.74 0.62 0.55 0.63 0.93 1.18 1.32 1.52 1.40

Using several years of sales data, beginning in May of 2001 (i.e., t=1 corresponds to May of 2001), the manufacturer summarized that the trend line that describes the monthly sales (in thousands of dollars) has the form Tt =578+4T. Assuming that a multiplicative model can be used to describe the sales data, generate a forecast for the total dollar sales the company can expect to receive in August of 2006.

Express your answer in thousands of dollars.

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Solution Summary

This solution involves a forecast generated based on a multiplicative model of sales data.

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Holt's seasonal forecast with multiplicative seasonal indices

** Please see the attached file for the complete problem description **

I have a table showing Holt's seasonal forecast with multiplicative seasonal indices. In this model, beta is twice the value of alpha, the seasonal indices average to 1 and the seasonal factors for quarter 1 and quarter 3 are both equal to 1.

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