Year Month Sales (£000s) 12 month MA CA Seas Dev

Y1 Jan 122.0
Feb 145.3
Mar 157.6
Apr 204.8
May 253.2
Jun 256.2 210.6
Jul 310.2 212.6 211.6 98.6
Aug 450.1 213.2 212.9 237.2
Sep 284.9 215.2 214.2 70.7
Oct 159.8 218.3 216.8 -57.0
Nov 100.3 220.4 219.3 -119.0
Dec 83.0 224.5 222.4 -139.4
Y2 Jan 145.5 230.1 227.3 -81.8
Feb 153.1 234.6 232.3 -79.2
Mar 181.3 238.9 236.7 -55.4
Apr 242.0 239.9 239.4 2.6
May 278.3 243.0 241.5 36.8
Jun 305.0 244.2 243.6 61.4
Jul 378.2 245.2 244.7 133.5
Aug 503.4 248.3 246.7 256.7
Sep 336.4 249.8 249.0 87.4
Oct 172.4 253.4 251.6 -79.2
Nov 137.6 257.7 255.5 -117.9
Dec 97.7 262.0 259.9 -162.2
Y3 Jan 157.4 263.9 262.9 -105.5
Feb 189.3 269.2 266.5 -77.2
Mar 200.1 271.7 270.5 -70.4
Apr 284.5 274.4 273.1 11.4
May 330.8 274.8 274.6 56.2
Jun 356.5 277.6 276.2 80.3
Jul 400.1
Aug 568.1
Sep 366.3
Oct 204.8
Nov 142.0
Dec 131.8 CA is Centered Average

Additive model calculating adjusted seasonal deviation

Mean
Y1 Y2 Y3
Jan -81.8 -105.5 -93.6646
Feb -79.2 -77.2 -78.2458
Mar -55.4 -70.4 -62.9
Apr 2.6 11.4 7.016667
May 36.8 56.2 46.51042
Jun 61.4 80.3 70.825
Jul 98.6 133.5 116.0333
Aug 237.2 256.7 246.9292
Sep 70.7 87.4 79.02708
Oct -57.0 -79.2 -68.0688
Nov -119.0 -117.9 -118.496
Dec -139.4 -162.2 -150.8

Sum -5.83542
Adjust 0.486285

Multiplicative model Mean

Y1 Y2 Y3
Jan 0.6 0.6 0.619384
Feb 0.7 0.7 0.684564
Mar 0.8 0.7 0.752842
Apr 1.0 1.0 1.026369
May 1.2 1.2 1.178574
Jun 1.3 1.3 1.271268
Jul 1.5 1.5 1.505666
Aug 2.1 2.0 2.077164
Sep 1.3 1.4 1.340405
Oct 0.7 0.7 0.711252
Nov 0.5 0.5 0.497862
Dec 0.4 0.4 0.374552

Sum 12.0399
Adjust 0.996686

Decriptive Answer:

Initially from the amplitude of the variation one may decide to use multiplicative model with 12 MA as
When a robust method of comparing the MSEs of both additive and multiplicative models is carried o
 Additive Model Multiplicative Model
Seas Ind Adjusted Estimated Error Error sq Adjusted
Seas dev Signal Seasonal
T+S Data - est signal index

1.47 116.52 328.1 -17.9 320.96 1.50

2.11 247.42 460.3 -10.2 104.36 2.07
1.33 79.51 293.7 -8.8 77.90 1.34
0.74 -67.58 149.2 10.6 113.05 0.71
0.46 -118.01 101.3 -1.0 1.07 0.50
0.37 -150.32 72.1 10.9 118.61 0.37
0.64 -93.18 134.1 11.4 129.66 0.62
0.66 -77.76 154.6 -1.5 2.21 0.68
0.77 -62.41 174.3 7.0 49.02 0.75
1.01 7.50 246.9 -4.9 23.88 1.02
1.15 47.00 288.5 -10.2 103.21 1.17
1.25 71.31 314.9 -9.9 98.81 1.27
1.55 116.52 361.3 16.9 287.06 1.50
2.04 247.42 494.2 9.2 85.43 2.07
1.35 79.51 328.5 7.9 61.67 1.34
0.69 -67.58 184.0 -11.6 134.68 0.71
0.54 -118.01 137.5 0.1 0.00 0.50
0.38 -150.32 109.6 -11.9 140.74 0.37
0.60 -93.18 169.8 -12.4 152.75 0.62
0.71 -77.76 188.8 0.5 0.26 0.68
0.74 -62.41 208.1 -8.0 63.58 0.75
1.04 7.50 280.6 3.9 15.32 1.02
1.20 47.00 321.6 9.2 84.39 1.17
1.29 71.31 347.5 9.0 80.42 1.27

MSE = 93.71

CA is Centered Average

The MSE obtained in the multiplicative model is lower than the M

Adjusted SD

-93.18
-77.76
-62.41
7.50
47.00
71.31
116.52
247.42
 79.51
-67.58
-118.01
-150.32

Adjusted SI

0.62 The data exhibits an upward trend

0.68 Sales are highest in August (in this month they are on average 10
0.75 and lowest in December (in this month they are on average only
1.02
1.17
1.27
1.50
2.07
1.34
0.71
0.50
0.37

12

multiplicative model with 12 MA as one cycle is made up of 12 months.

d multiplicative models is carried out, it clearly showed that the multiplicative method had lower MSE and hence multiplicative model fits
 Multiplicative Model
Estimated
Signal Error* Error squared * The error is found using (Error= Data - Est Signal) in order
TxS Data - est signal * If you use the formula E= Y / T x S then the error you calc

317.54 -7.3 53.83

440.76 9.3 87.19
286.18 -1.3 1.64
153.65 6.1 37.79
108.84 -8.5 72.97
83.03 0.0 0.00
140.31 5.2 26.89
158.53 -5.4 29.47
177.62 3.7 13.57
244.88 -2.9 8.30
283.64 -5.3 28.50
308.69 -3.7 13.63
367.27 10.9 119.43
510.82 -7.4 55.12
332.70 3.7 13.69
178.35 -5.9 35.39
126.80 10.8 116.53
97.02 0.7 0.47
162.32 -4.9 24.20
181.86 7.4 55.31
202.96 -2.9 8.18
279.36 5.1 26.47
322.58 8.2 67.51
349.99 6.5 42.42

39.10

ive model is lower than the MSE obtained in the additive model
 600.0

500.0

400.0

month they are on average 107% above the trend)

nth they are on average only 37% of the trend. 300.0

200.0

100.0

0.0 Apr

Mar
Apr
Jun

Aug
Sep
Mar
Jan
Feb

Jan
Feb

Jun
Jul

Oct
May

Nov
Dec

May
Y1 Y

hence multiplicative model fits better.

r= Data - Est Signal) in order to match the error with the error in the additive model.
T x S then the error you calculate is multiplicative error which cannot be compared with additive error)
 Nov
Dec
Jan
Feb
Mar
Apr
May
Jun

Y2
Jul
Aug
Sep
Oct
Sales (£000s)

Nov
Dec
Jan
Feb
Mar
Apr
May
Jun

Y3
Jul
Aug
Sep
Oct
Nov
Dec
Sales (£000s)
Sales (£000s)