## What is Semi Average Method-Example?

The details of sales turnover .of a fertilizer company for the period 1997-2003 are given in the following table. Compute the estimated sales for the year 2004.

 Year 1997 1998 1999 2000 2001 2002 2003 Sales (in Crore) 39 48 65 78 95 91 112

Solution.

Sales in Semi-average

Year Crores Semi-total Trend Value

 Year Sales in Crore Semi-total Semi-average Trend Value 1997 39 152 50.67 1998 48 1999 65 2000 78 2001 95 298 99.33 2002 91 2003 112

b = [Semi-average trend value of 2002]- [Semi-average trend value for 1998]/2002-1998

= 99.33-50.67/2002-1998 = 12.165

a = Semi-average trend value for 1998

= 50.67

The model is as given below.

Y = a + b (X − 1998)

= 50.67 + 12.165 (X − 1998);

In the above equation, (X − 1998) is called the signature of the model.

The sales when X = 2004 is computed below.

Y = 50.67 + 12.165 (X − 1998)

= 50.67 + 12.165 (2004 − 1998)

= 50.67 + 12.165 (6) = 123.66

= 124 crores

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