Forecasting

Question 1

What does RPI and CPI stand for

Answer 1

Retail price index and Consumer price index

Question 2

What are RPI and CPI used for

Answer 2

Used as a measure of inflation

Question 3

How to work out forecasted price using index numbers

Answer 3

new price = old price x index in month you are going to / index in month you are coming from

Question 4

How to calculate the price index

Answer 4

price in current month /
price in base month x
index in base month

Question 5

What will the index in the base month always be

Answer 5

100

Question 6

What is simple regression

Answer 6

Forecasting based on historical data, software plots data collected over a period of time into a line of best fit, which is then extended into future periods

Question 7

Formula for line of best fit

Answer 7

y = a + bx
Y is demand or price
X is the time period

Question 8

Time series

Answer 8

Used to identify an underlying trend in data which can then be used for forecasting

Question 9

Time series calculation

Answer 9

Actual or forecast =
Trend +
Seasonal variation

Question 10

Index numbers

Answer 10

Very important in calculating future demand, future selling prices and future cost prices.

Question 11

If a price index rises from 150 to 162 what is the percentage of increase

Answer 11

(162-150) / 60 x 100 = 8%