Question

our firm experiences strong seasonal demand, based on financial quarters. You have calculated the following seasonal relatives (or "indices") for each quarter: First Financial Quarter: 0.5 Second Financial Quarter: 1.0 Third Financial Quarter: 1.25 Fourth Financial Quarter: 1.25 The marketing department has just forecasted that 10,000 units will be ordered in the next fiscal year. The operations manager wants you to tell her how many units will be ordered in the fourth quarter of next fiscal year. What is your answer

Answer 1

Answer: 3,125 UNITS

Explanation:

According to the question above, the seasonal relatives for each quarter for the current year financials has been calculated thus:

1st quarter                      0.5

2nd quarter                    1.0

3rd quarter                     1.25

4th quarter                     1.25

using the above relatives to calculate what the next fiscal year order will be:

Total relatives above = 4.0

for the 4th quarter for the next year order :

= 1.25/4.0 * forecasted qty to be ordered for the next fiscal year

=1.25/4.0 * 10,000

0.3125 * 10,000

=3,125 units will be ordered in the forth quarter of the next fiscal year.

Answer 2

The number of units that would be ordered in the next fiscal year would be 3125

The financial report

The first quarter = 0.5

The second quarter = 1.0

The third quarter = 1.25

The fourth quarter = 1.25

0.5+1+1.25+1.25 = 4

The relatives are 4

The solution for the 4th quarter

$\frac{4thQuarter}{TotalRelatives} \\\\= \frac{1.25}{4}$

= 0.3125

The number of the units in the fiscal year would be 0.3125*10000

= 3,125 units

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