Seasonal Index Info

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 ] seasonal index

After dividing actual by the seasonal index, you get , which reveals the true trend and cycle. It is used to measure and remove seasonal

[ \textActual = \textTrend \times \textSeasonal \times \textIrregular ] Group all ratios by month (or quarter, etc

| Year | Q1 | Q2 | Q3 | Q4 | |------|----|----|----|----| | 2022 | 80 | 120 | 100 | 140 | | 2023 | 90 | 130 | 110 | 150 |

This ratio represents the combined effect of seasonality and random noise. Group all ratios by month (or quarter, etc.) and calculate the median or mean (median is less sensitive to outliers). Step 4: Adjust So That Average = 1 If the average of your raw seasonal indices is not exactly 1, adjust them: