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(Measurement If Seasonal Fluctuations) Simple Average
(Measurement If Seasonal Fluctuations) Simple Average
2,481
Seasonal patter
25. Measurement of Seasonal
Fluctuations.
economic
patternstheiare
phenomena and the
exhibited by most of the business and
reasons:
study is necessitated by the following
i) To isolate the seasonal variations,
i.e., to determine the effet of
seasons on the size of the variable, and
( ) To eliminate them, i.e., to study as to what would be the vale
of the variable if there were no seasonal swings.
The determination of seasonal effects is of paramount importance in
planning (i) business efficiency, or (ii) a production programme. For
example, the head of a departmental store would be interested to study
the variations in the demands of different articles for different months in
order to plan his future stocks to cater to the public demands due tol
seasonal swings. Moreover, the isolation and elimination of seasona,
factor from the data is necessary to study the effect of
for the study of seasonal variation the data must be
cycles. Obviously
given for parts' of
year, viz., monthly or quarterly, weekly, daily or hourly. Different
methods for measuring seasonal variations are
(i) Method of simple averages.
(ii) 'Ratio to trend' method.
(iii) 'Ratio to moving average'
iv) Link relative' method. method.
251. Method of
methods of measuring Simple Averages. Tnis is the simplest of all the
seasonality and consists in the following steps
() Arrange the data by
data are given). years and months (or y
quarters if qua
(i)
Compute the average xi, (i=1, 2, for
all the years.
[ith month, i=1, 2,..., 12 12) for the ith month
December respectively]. represents
...,
fth ur
February,."
January, Februs
(iil) Compute the average 3 of the monthly avera ges, 1.e.,
12