A seasonal index is a measure of how a particular season compares
with the average season. Consider the monthly seasonal indices for unemployment given in the table below: Seasonal indices are calculated so that their average is 1. This means that the sum of the seasonal indices equals the number of seasons. Thus, if the seasons are months, the seasonal indices add to 12. If the seasons are quarters, then the seasonal indices would add to 4, and so on. January has seasonal index of 1.1which means, Januarys unemployment is 10% above average. Septembers unemployment is 15% less than average. Deseasonalising is the process that is used to remove the seasonal efects from a set of data. This allows any underline trend to be made clearer. We can use seasonal indices to deseasonalise time series. To calculate deseasonalised data, each entry is divided by its seasonal index as follows. Deseasonalising data Example: Deseasonalise the quarterly sales fgures of Summer Year1 using the data and seasonal indices tables below. Solution: Deseasonalised data for Summer 1 = Summer 1 data = 920 = 9! Summer seasonal inde" 1#0! Calculating seasonal indices E"am$le: Mikki runs a shop and she wishes to determine %uarterl& seasonal indi'es based on her last years sales, which are shown in the table below. Solution: Using the above formula to fnd the seasonal index seasonal inde" = (alue of t)e %uarter %uarter a(era*e Find the quarter average %uarter a(era*e = 920 + 10, + 12-1 + --. = 92! - Find the seasonal index of each season seasonal inde" Summer = 920 = 0#99/ 92! seasonal inde" Autumn = 10, = 1#1/. 92! seasonal inde" 0inter = 12-1 = 1#!-, 92! seasonal inde" S$rin* = --. = 0#-! 92! Calculating seasonal indices (several years data) Suppose that Mikki has in fact three years of data, as shown. Use the data to calculate seasonal indices, correct to two decimal places. Solution: 1)e seasonal a(era*e of &ear 1 2as found $re(iousl& Find the quarter average for year 2 %uarter a(era*e &ear 2 = 10!, + 110 + 1!,. + ,-1 = 102 - Find the seasonal index of each season seasonal inde" Summer = 10!, = 1#00/ 102 seasonal inde" Autumn = 110 = 1#1- 102 seasonal inde" 0inter = 1!,. = 1# !19 102 seasonal inde" S$rin* = ,-1 = 0#,2. 102 Find the quarter average for year 3 %uarter a(era*e &ear 2 = 1299 + 1!2- + 1-,0 + .,9 = 11! - Find the seasonal index of each season seasonal inde" Summer = 1299 =1#09 11! seasonal inde" Autumn = 1!2- = 1#119 11! seasonal inde" 0inter = 1-,0 = 1#22. 11! seasonal inde" S$rin* = .,9 = 0#,,/ 11! 1o 3nd t)e seasonal indi'es of t)e ! &ears 2e need to 3nd t)e a(era*e seasonal inde" of ea') season# 45ES1IONS 1 The table below shows the monthly sales fgures and seasonal indices (for January to November) for a product produced by the U-beaut company. a Complete the table by calculating the missing seasonal index. b Interpret the seasonal index for i February ii August 2 The table below shows the quarterly newspaper sales of a corner store for Year 1. Also shown are the seasonal indices for newspaper sales for the frst, second and third quarters. Complete the table.
3 Each of the following data sets records monthly sales ($000s). Use the data to determine the seasonal indices for the 12 months. Give your results cor rect to two decimal places. Check that your seasonal indices add to 12. - The number of waiters employed by a restaurant chain in each quarter of one year, along with some seasonal indices which have been calculated from the previous years data, are given in the following table.
a What is the seasonal index for the second quarter? b The seasonal index for Quarter 1 is 1.30. Explain what this mean in terms of the average quarterly number of waiters. c Deseasonalise the data. , The following table shows the number of students enrolled in a 3-month computer systems training course along with some seasonal indices which have been calculated from the previous years enrolment fgures. Complete the table by calculating the seasonal index for spring and the deseasonalised student numbers for each course. . The following table shows the monthly sales fgures and seasonal indices (for January to December) for a product produced by the VMAX company. a Complete the table by: i calculating the missing seasonal index ii evaluating the deseasonalised sales fgures b The seasonal index for July is 0.90. Explain what this means in terms of the average monthly sales. ANS0E6S 1a 1.0 bi In general, in February, monthly sales are 30% more than in an average month. Ii In general, in August, monthly sales are 30% less than in an average month. 2 ! - b In Quarter1therestaurantchainemploys30% more waiters than the number employed in an average quarter. 5 6 c In July the VMAX company records 10% fewer sales than in an average month.