Assume that in 2008 the quarterly demands were 10,30,20,and 40.This would give a yearly demand of 100 units.Further,assume that in 2009 the annual demand is expected to increase to 130 units.Then,the model for the second quarter (2nd Q) forecast adjustments would be
A)130(30/100) = 39.
B)100(40/100) = 52.
C)10(130/100) = 39.
D)40(100/130) = 31.

Question

Quizplus · Accepted Answer

The correct model for forecasting the second quarter adjustments is based on the proportion of the demand of that quarter in the previous year to the total annual demand of the previous year, multiplied by the expected annual demand for the current year. Thus, for the second quarter, it's 130 (expected annual demand for 2009) times the proportion of the second quarter demand in 2008 (30) to the total demand in 2008 (100), which equals 39.

Assume That in 2008 the Quarterly Demands Were 10,30,20,and 40