‘Question “ George Kyparisis ewns a. company that manufactures sailboats. Actual demand for George’s sailboats during each of the past four seasons was as follows: YEAR SEASON 1 2 3 4 Winter 400 1200 1000 900 Spring 4500 400 1,600 1,00 Summer 4000 2100 2,000 1900 Fall 600 750 650 500 George has forecasted that annual demand for his sailboats in year 5 will equal 5,600 sailboats. Based on this ‘data and the multiplicative seasonal model, what will the demand level be for George's sailboats in the spring of year 52Step! lof? In this problem, we are tasked to forecast the demand level for George's sailboats in the spring of year 5 using a multiplicative seasonal model given that George forecasted that the annual demand for his sailboats in year 5 will equat 5,600 sailboats Step2 2019 Multiplicative Seasonal Model ‘A method of seasonal forecasting that involves multiplying seasonal components by an estimate of average demand to obtain a seasonal forecast. Step 3 Soto Multiplicative Seasonal Model is computed using this formula: pec — PEDEe Annual Demant ss caaaial Tite No, of seasonsStep « 4 ote Let us first compute for the seasonal Index Using this formula: seasonal Index — A€*#8# Period Demand seasonal ndex = “Average Seasonal Demand ‘Where: Average Period Demand is computed as: . ¥o Historical demand each season Averi Period Demand = S———— __$__$______ ase No, of historical period Average Seasonal Demand is computed as: ¥ Average Period Demand As Demand — ‘verage seasonal Deman Re hee‘Step 5 safe Let us first compute for the Average period demand using the given data in the problem, Season Winter Spring Summer Fall Year 4,400 1,800 1,000 600, Year 4200 1400 2,100 750 Year 1000 1,600 2,000 650 Year 900, 800 1,900 500. Computation 1, 400 + 1, 200 + 1, 000 + 900 4 1,500 + 1,400 +1,600 + 1,500 4 1,000 + 2, 100 + 2,000 + 1900 4 600 + 750 + 650 + 500 4 ¥ Average period demandSteps bof? Now, let us compute for the Average seasonal demand using the formula in step 4 Average seasonal Demand = £2Average Period Demand No. of seasons Therefore, the average seasonal demand for George's sailboats is 1,250. Step7 Tote Now let us compute for the Seasonal Index for the season of spring using the formula in step 4 and the computed vaiues in step Sand 6. Average Period Demand ‘Se al Index = —————__—_—__———. easonal Index = “hverage Seasonal Demand 1,500 ~ 1,250 =([L20Step 8 Bote Finally, let us forecast the demand in the spring of year 5 with expected annual demand of 5,600 using the formula in step 3 and computed data in the previous step. Expected Annual Demand. No. of seasons Forecast = x Seasonal Index 800 1.20 = 1,400 x 1.20 = [1,680 ‘The forecasted demand for George's sailboats in the spring of year 5 is 1,680. Result 9019 1680