In-Class Handout: Multiplicative Seasonal Model

Average Average
Demand Demand Demand Season Monthly Seasonal
Month Year 1 Year 2 Year 3 Demand Demand Index
Jan 80 85 105 90 94
Feb 70 85 85 80 94
Mar 80 93 82 85 94
Apr 90 95 115 100 94
May 113 125 131 123 94
Jun 110 115 120 115 94
Jul 100 102 113 105 94
Aug 88 102 110 100 94
Sept 85 90 95 90 94
Oct 77 78 85 80 94
Nov 75 82 83 80 94
Dec 82 78 80 80 94

* The annual demand in Year 4 is expected to be 1,200 units, using the seasonal indices
forecast the monthly demand for Year 4.

Month Forecasted Demand

Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec

Source: Heizer, J., B. Render, and C. Munson (2020) Operations Management: Sustainability and Supply Chain Management (13th Edition). Pearson. Example 9, p. 127-128.
Attendance at a new theme-park attraction has been as follows:
*** Please round to two decimal places within your calculations and round your forecasts to the nearest whole number.

Guests (in thousands)

Quarter Year 1 Year 2 Year 3
Winter 73 65 89
Spring 104 82 146
Summer 168 124 205
Fall 74 52 98

1. Compute the seasonal indices using all of the data.

Seasonal
Quarter Index
Winter
Spring
Summer
Fall

2. The annual demand in Year 4 is expected to be 500 guests (in thousands), using
the seasonal indices forecast the quarterly demand for Year 4.

Forecasted
Demand
Quarter (in thousands)
Winter
Spring
Summer
Fall

Source: Adapted from Heizer, J., B. Render, and C. Munson (2020) Operations Management: Sustainability and Supply Chain Management (13th Edition). Pearson. Problem 4.27.