John is trying to initialize the seasonality indexes for an exponential smoothing model with seasonality using the following demand data.Among his many decisions, one was to set the seasonality index for the ______ quarter to ______.Fill in the blanks correctly.
$$\begin{array} { c c c c c }
\text { Quarter } & 1 & 2 & 3 & 4 \
\hline \text { Demand } & 40 & 250 & 190 & 110
\end{array}$$
A) 1st/0.545
B) 2nd/2.124
C) 4th/0.7457
D) 3rd/1.988

Question

John is trying to initialize the seasonality indexes for an exponential smoothing model with seasonality using the following demand data.Among his many decisions, one was to set the seasonality index for the ______ quarter to ______.Fill in the blanks correctly.
$$\begin{array} { c c c c c } 
\text { Quarter } & 1 & 2 & 3 & 4 \
\hline \text { Demand } & 40 & 250 & 190 & 110
\end{array}$$
A) 1st/0.545
B) 2nd/2.124
C) 4th/0.7457
D) 3rd/1.988

Quizplus · Accepted Answer

To calculate the seasonality index for each quarter in exponential smoothing model with seasonality, we need to divide the average demand for that quarter by the overall average demand.

The overall average demand is (40+250+190+110)/4 = 147.5

The average demand for each quarter is:
- Quarter 1: 40
- Quarter 2: 250
- Quarter 3: 190
- Quarter 4: 110

So the seasonality index for each quarter is:
- Quarter 1: 40/147.5 = 0.2712
- Quarter 2: 250/147.5 = 1.6957
- Quarter 3: 190/147.5 = 1.2881
- Quarter 4: 110/147.5 = 0.7458

Therefore, the best choice is C, where the seasonality index for the 4th quarter is 0.7457.

John Is Trying to Initialize the Seasonality Indexes for an Exponential