Question

By the method of moving averages, the seasonal index for four quarters equals to:
1. \(\rm \frac{Average}{\text {Grand Average}}\)× 100
2. \(\rm \frac{Average}{\text {Grand Average}}\) × 4
3. \(\rm \frac{Average}{\text {Grand Average}}\) × 10
4. \(\rm \frac{Average}{\text {Grand Average}}\)

Answer 1

Correct Answer - Option 1 : \(\rm \frac{Average}{\text {Grand Average}}\)× 100

Explaination

Seasonal index for four quarters given by calculating average of quarterly average = Grand average and calculating quarterly averages = average age of quarter

Seasonal index = (Average of quarter/Grand average) × 100

Seasonal index for first term is given by I₁ = S₁/S × 10

S₁ = Average of first term

S = average of all term SS_J/k

J = 1, 2, 3, 4 ----

K = 12 for monthly data

K = 4 for quarterly data

∴ Seasonal index = (Average of quarter/Grand average) × 100