Question 1
Figure 1. Graph of sales (000’s) by month for years 1 through 3.
By looking at the time series plot above we can conclude that the restaurant appears to
experience the same sales pattern every year, wherein sales start high in January through
March and then decrease, before rising again in the latter months of November and
December. Thus, we can establish that a cycle occurs each year, and, thus, the period of
analysis is one year, and each month constitutes a ‘season.’
Question 2
Table 1. Summary of steps in the seasonal index calculation procedure.
As shown in the last column of Table 1, the seasonal indexes from June to November are
below 1, which indicates that these are low seasonal sales months (in red). The seasonal
indexes from December to May are above 1, which means that these are high seasonal
sales months (in green).
Intuitively, we could expect higher seasonal sales in December and January due to the
holiday season. However, it is surprising that the following four months have higher
seasonal sales as well. Simultaneously, one would expect higher sales in the summer
season when the island is more likely to get the most tourists. The seasonal sales, however,
are low from June to November.
Question 3
Table 2. Summary of scaled seasonal factors, as determined by average seasonal factors
calculated from the seasonal indices in Table 1 above.
Table 3. Summary of deseasonalized sales for years 1 through 3.
