Trends and seasonal variations

[Julannmye]

Hi all<BR><BR>I need some help!!!!<BR><BR>I am tryng to calculate some forecast sales figures, in total I have 2 and 3/4 years which totals 11 quarters and want to calculate the last quarter of the 3rd yr and the 4 quarters of the following year.<BR><BR>I have put the historical data into a colum and calculated the 4-point moving average. But what do I do next ??? <BR><BR>

[bryan]

The four point moving average is your trend line.<BR><BR>Calculate the seasonal variations as Actual -Trend, do it on your calculator and include the sign if the answer.<BR><BR>Set out a matrix with years horizontally and quarters vertically, then insert the variations you have calculated in the relevant line/column.<BR><BR>Total each column and calculate its average. These are the seasonal variations you will apply to the next stage.<BR><BR>Take the last figure in your moving average and subtract the first, divide this by the number of numbers-1 in your trend column i.e. if there are 9 numbers, divide by 8.<BR><BR>You then add this number on to the last trend line number for each quarter you wish to forecast. <BR><BR>The numbers you have now calculated are your forecast trend line. Now add the seasonal variations in each quarter you want to forecast, being careful with negative numbers, that is 20 + (-5) = 15<BR><BR>This then is your forecast.<BR>

[Julannmye]

Thanks for this !!!<BR><BR>I am confused though, when you say Calculate the seasonal variation as Actual - Trend, which actual figure do I use? Quarter 2 or quarter 3? <BR><BR>The reson I am asking is because the trend figure is in the middle of q2 and q3 of the actual figures.<BR><BR><BR><BR><BR>

[Julannmye]

Also...... when I calculate the average seasonal variations they don't total zero. I thought they were ment to.<BR><BR>In the my book it tells me to make minor adustment to the figures,but which figures?<BR><BR>Please help !

[bryan]

If you do a 2 figure moving average of your 4 figure column they will be opposite a quarter.<BR><BR>The figures that should sum to zero are the final average seasonal variations. If they dont, increase or decrease the largest figures to make it sum to zero. There is an accurate method, but space and the primitive format facilities of this page prevent it. Not to put too fine a point on it, just frig it, like you do at work when the bank won`t balance!<BR><BR>If you are still in a fog, send me the question as a Word file to bryan.cooper@hychester.co.uk and I`ll do you an answer with explanations.