The quarterly seasonal indexes for a firm’s electricity consumption are 115, 92, 81, and 112 for quarters I-IV. It has been forecast that electricity consumption will be 850,000 kilowatt-hours during 2008. Forecast electricity consumption for each quarter of 2008

Answer 1

The quarterly seasonal index represents the ratio in percent of the expected value of the quarter over the quarterly average over the year.

For the yearly forecast consumption of 850,000 kWH, the quarterly average is 850,000/4 = 212,500 kWH.
The quarterly forecasts are therefore:
1. 212,500*115/100 = 244,375 kWH
2. 212,500*92/100 = 195,500 kWH
3. 212,500*81/100 = 172,125 kWH
4. 212,500*112/100 = 238,000 kWH

Check:
Total
= 244,375+195,500+172,125+238,000
= 850,000 (yearly consumption)