1. What Is a Seasonal Index? A seasonal index (also called a seasonal component or seasonal factor) is a numerical value that quantifies how a particular time period (e.g., a month, quarter, or week) compares to the average period in a seasonal cycle. It is used to measure and remove seasonal variation – predictable, recurring fluctuations that happen within a fixed period (usually one year).
[ \textAdjusted Index_i = \frac\textRaw Index_i\textMean of Raw Indices ]
(We’ll skip full arithmetic for brevity – but you’d smooth the data.)
Now each index shows the seasonal effect relative to the overall average. Suppose quarterly sales (in $1,000) for two years:
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1. What Is a Seasonal Index? A seasonal index (also called a seasonal component or seasonal factor) is a numerical value that quantifies how a particular time period (e.g., a month, quarter, or week) compares to the average period in a seasonal cycle. It is used to measure and remove seasonal variation – predictable, recurring fluctuations that happen within a fixed period (usually one year).
[ \textAdjusted Index_i = \frac\textRaw Index_i\textMean of Raw Indices ]
(We’ll skip full arithmetic for brevity – but you’d smooth the data.)
Now each index shows the seasonal effect relative to the overall average. Suppose quarterly sales (in $1,000) for two years: