Question

Calculate the seasonal indices from the following data using the average method:

Year	I Quarter	II Quarter	III Quarter	IV Quarter
2008	72	68	62	76
2009	78	74	78	72
2010	74	70	72	76
2011	76	74	74	72
2012	72	72	76	68

Answer 1

Computation of Seasonal Index by the method of simple averages

Year	I Quarter	II Quarter	III Quarter	IV Quarter
2008	72	68	62	76
2009	78	74	78	72
2010	74	70	72	76
2011	76	74	74	72
2012	72	72	76	68

Grand Average = ${\displaystyle \frac{\text{Sum of} 4 \text{Quarterly Averages}}{4}}$

= ${\displaystyle \frac{74.4+71.6+72.4+72.8}{4}}$

= ${\displaystyle \frac{291.2}{4}}$

= 72.8

S.I for I Quarter = ${\displaystyle \frac{\text{Average of I Quarter}}{\text{Grand Average}}\times 100}$

= ${\displaystyle \frac{74.4}{72.8}\times 100}$

= 102.20

S.I for II Quarter = ${\displaystyle \frac{\text{Average of II Quarter}}{\text{Grand Average}}\times 100}$

= ${\displaystyle \frac{71.6}{72.8}\times 100}$

= 98.35

S.I for III Quarter = ${\displaystyle \frac{\text{Average of III Quarter}}{\text{Grand Average}}\times 100}$

= ${\displaystyle \frac{72.4}{72.8}\times 100}$

= 99.45

S.I for IV Quarter = ${\displaystyle \frac{\text{Average of IV Quarter}}{\text{Grand Average}}\times 100}$

= ${\displaystyle \frac{72.8}{72.8}\times 100}$

= 100