Measurements of Trends: Methods of measuring Seasonal Variations By Simple Averages

Methods of measuring Seasonal Variations By Simple Averages :

Seasonal Variations can be measured by the method of simple average. The data should be available in season wise likely weeks, months, quarters.

Method of Simple Averages:

This is the simplest and easiest method for studying Seasonal Variations. The procedure of simple average method is outlined below.

Procedure:

(i) Arrange the data by months, quarters or years according to the data given.

(ii) Find the sum of the each months, quarters or year.

(iii) Find the average of each months, quarters or year.

(iv) Find the average of averages, and it is called Grand Average (G)

(v) Compute Seasonal Index for every season (i.e) months, quarters or year is given by

(vi) If the data is given in months

Similarly we can calculate SI for all other months.

(vii) If the data is given in quarter

Example 9.8

Calculate the seasonal index for the monthly sales of a product using the method of simple averages.

Solution:

Computation of seasonal Indices by method of simple averages.

Similarly other seasonal index values can be obtained.

Example 9.9

Calculate the seasonal index for the quarterly production of a product using the method of simple averages.

Solution:

Computation of Seasonal Index by the method of simple averages.