The way a seasonal index is computed involves which of the following steps?
A)Remove the effect of seasonal and random variation by regression analysis.
B)For each time period,compute the ratio, which removes most of the trend variation for that time period.
C)Calculate the average of all the ratios: over all time periods to remove random variation and leaving a measure of seasonality.
D)All of these choices are true.

Question

The way a seasonal index is computed involves which of the following steps?
A)Remove the effect of seasonal and random variation by regression analysis. 
B)For each time period,compute the ratio, which removes most of the trend variation for that time period. 
C)Calculate the average of all the ratios: over all time periods to remove random variation and leaving a measure of seasonality. 
D)All of these choices are true.

Quizplus · Accepted Answer

All of these steps are involved in computing a seasonal index. First, the effect of seasonal and random variation is removed using regression analysis. Then, for each time period, a ratio is computed which removes most of the trend variation for that time period. Finally, the average of all the ratios is calculated to remove random variation and leaving a measure of seasonality.

The Way a Seasonal Index Is Computed Involves Which of the Following