Business at M and K Sunshine Boutique can be viewed as falling into three
distinct seasons:
(1) Christmas (November – December)
(2) Rainy season (April – June)
(3) All other times.
The average weekly sales in thousands of shillings during each of these seasons
in the past four years has been as follows:
Year
Season 1999 2000 2001 2002
1 1,856 1,995 2,241 2,280
2 2,012 2,168 2,306 2,408

3 985 1,072 1,105 1,120
An appropriate software was used to analyze the above data and the following
output is provided:
Program output
Period Sales Moving
Average
Sh.
Seasonal –
Irregular
Component
Sh.
Deseasonalized
Data
Sh.
1 1,856 – 1.156 1,605.667
2 2,012 1,618 1.225 1,642.648
3 985 1,664 0.586 1,679.630
4 1,995 1,716 1.162 1,716.612
5 2,168 1,745 1.236 1,753.594
6 1,072 1,827 0.599 1,790.576
7 2,241 1,873 1.226 1,827.558
8 2,306 1,884 1.237 1,864.539
9 1,105 1,897 0.581 1,901.521
10 2,280 1,931 1.176 1,938.503
11 2,408 1,936 1.219 1,975.485
12 1,120 – 0.557 2,012.467
Number of moving periods: 3
Number of periods: 12
Mean Absolute Deviation (MAD) = 493.3333
Trend line of the deseasonalized data Tt
= 1,580.11 + 33.96t

NORMAL CURVE
AREAS
Under the
STANDARD
NORMAL CURVE
from 0 to Z
0 Z
Required:
(i) Explain the above output. (3 marks)
(ii) Determine the seasonal indexes and explain what they mean. (8
marks)
(iii) Determine the short range forecast for the 13th, 14th and the 15th periods.
(4 marks)