Question

Problem 3-12

The following equation summarizes the trend portion of quarterly sales of condominiums over a long cycle. Sales also exhibit seasonal variations.

F_t = 62 − 5.2t + 4.2t ²
  
where
F_t = Unit sales
t = 0 at the first quarter of last year

Quarter	Relative
1	1.15
2	1.00
3	.65
4	1.30

Using the information given, prepare a forecast of sales for each quarter of next year (not this year), and the first quarter of the year following that. (Round intermediate calculations and final answers to 2 decimal places.)

Answer 1

The following explains the required forecast of sales for each quarter of next year and the first quarter of the year following that:

Trend component is calculated using the formula given, 62 - 5.2t + 4.2t²

Forecast of sales:

for any variance we have used, ±0.05

Hope the answer is helpful