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How to calculate seasonal index. Pick time period (number of years) Pick season period (month, quarter) Calculate average price for season Calculate average price over time Divide season average by over time average price x 100. Using Seasonal Index to Forecast.
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How to calculate seasonal index • Pick time period (number of years) • Pick season period (month, quarter) • Calculate average price for season • Calculate average price over time • Divide season average by over time average price x 100
Using Seasonal Index to Forecast • Observe price in time t1 P1 • Forecast price in time t2 P2 • Start with P1/ I1 = P2 / I2 • Then P1 x I2 / I1 = P2 • Assume that cows are selling at $50/cwt in November. What is the forecast of February?