Question 1

A seasonal ski resort uses time series analysis to forecast visitor numbers. The underlying trend for Quarter 1 is estimated to be 15,000 visitors. The seasonal variation for Quarter 1 is +20% using a multiplicative model.

What is the forecasted number of visitors for Quarter 1?

Accepted Answer

In a multiplicative model, Forecast = Trend × Seasonal Variation. Convert +20% to a multiplier of 1.20.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Using an additive model (e.g., adding 20 visitors instead of 20%).

A seasonal ski resort uses time series analysis to forecast visitor numbers. The underlying trend for Quarter 1 is estimated to be 15,000 visitors. The seasonal variation for Quarter 1 is +20% using a multiplicative model.

What is the forecasted number of visitors for Quarter 1?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 1

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