National University of Modern Languages

Lahore

Assignment

M.Com-4(A)

Roll # L-1175

Production Management

Submitted to: Sameeulaah

Submitted by: Iqra Butt

Submission Date: 20-04-2020

Dependent Variable and Independent Variable

Difference
What is industry seasonality?

A seasonal industry refers to a group of companies related by their

common business activities that earn the majority of their income during a fairly
small number of weeks or months each calendar year. The annual business cycle
for these firms is fairly predictable.

Example

 Textile industry
 Fashion industry

Definition of 'Seasonal Adjustment'

Definition:
  This is a technique aimed at analyzing economic data with the purpose
of removing fluctuations that take place as a result of seasonal factors.

Description: 
Seasonal adjustment of economic/time data plays a crucial role
analyzing/judging the general trend. In the world of finance, comparison of
economic data is of immense importance in order to ascertain the growth and
performance of a company. In this process, seasonal factors might create big
fluctuations in the pattrens. .

For example,
Sales of air conditioners are at their peak during summers and quite
less during winters. Thus, to study the general trend of sales of air conditioners, the
data needs to be seasonally adjusted.
How to Manage your Seasonal Demand
Understanding how seasonal factors affects
customer purchasing habits helps businesses position themselves to take advantage
for variations in demand. Knowing demand patterns can help an organization
strategically optimize their inventory levels to avoid inflating carrying costs, but
also ensuring that customer demand is easily serviced through having inventory on
hand when needed.

Being able to free up working capital that is usually sunk into excess

inventory while increasing service rates could have drastic effect on your
profitability. With regard to forecasting, seasonality refers to the portion of demand
fluctuation accounted for by a reoccurring pattern. This is identified by the demand
pattern repeating systematically over time.

Remember that if seasonality is used on an item, the demand should be adjusted

before used in the forecast calculation. Best practice is to keep seasonal demand
and other variable factors separated from your base demand calculations in order to
keep the data clean and easy to use for forecasting going forward. Below is an
example of the different demand factors that can impact or inflate your normal
base demand.
Factors That Can Affect Base Demand Forecasting

The orange bar graph represents the average based demand an organization should
carry to meet customer demand. The other factors are additional influencers on
demand, but are not typically constant across any given period and can vary
dramatically. Factors like market trends, market knowledge, sales and marketing
projections and seasonality of demand inputs are all separated for each and every
product, to ensure the integrity and accuracy of the forecasts