With the multiplicative seasonal method of forecasting,
A) the times series cannot exhibit a trend.
B) seasonal factors are multiplied by an estimate of average demand to arrive at a seasonal forecast.
C) the seasonal amplitude is a constant, regardless of the magnitude of average demand.
D) there can only be four seasons in the time series data.

Question

Quizplus · Accepted Answer

The multiplicative seasonal method of forecasting involves multiplying seasonal factors by an estimate of average demand to arrive at a seasonal forecast. This method can be used for time series data with both a seasonal pattern and a trend. The seasonal amplitude is not necessarily a constant and can vary depending on the magnitude of average demand. There can be more or less than four seasons in the time series data.

With the Multiplicative Seasonal Method of Forecasting