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 be only four seasons in the time-series data.

Question

Quizplus · Accepted Answer

In the multiplicative seasonal method of forecasting, seasonal factors are multiplied by an estimate of average demand to arrive at a seasonal forecast. This allows for the incorporation of seasonal patterns in the data. This method does not require the time series to have a trend, and there can be any number of seasons in the data. The seasonal amplitude is not necessarily a constant, as it can vary with the magnitude of average demand.

With the Multiplicative Seasonal Method of Forecasting