A few days ago
can someone give me an example of how to calculate a seasonality index on price.?
I’m working on a project forecasting the seasonality of a product in school, I have to figure out the seasonality index on price, but there’s no clear answer online to help me understand how to calculate seasonality quarterly. Also can someone tell me what does total adjustment mean? Does anyone know what a stock out effect is calculated? Thanks!
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A few days ago
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Take gasoline for example. Every summer, the price tends to go up and then during the winter (when demand drops) the price tends to go down again.
A seasonally adjusted price would adjust for this yearly fluctuation without showing it as an increase or decrease in the price. However, a greater than expected rise would be an increase and a less than expected rise would be a decrease.
So in order to calculate it, you need to know what the “normal” fluctuations are first. If it normally goes up 5% and instead went up 8%, then the seasonally adjusted price went up only 3%.
I hope this helps!
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