The marketing department has just forecasted that 15,000 units of item #780 will be ordered in the next fiscal year. Based on the marketing department’s forecast and noting that the seasonal relative associated with the second fiscal quarter is 1.50, how many units of item #780 will be ordered just during the second fiscal quarter?

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Answer:

5625 units of item #780

Explanation:

15,000 units in a year.

There are 4 quarters in a year.

So, that would mean:

15,000/4 = 3750 evenly per quarter

But for 2nd quarter, the seasonal relative is given as 1.50. This means that the demand for that product (according to forecast) will be actually 1.50 times of the normal (according to marketing dept.).

So, 3750 * 1.5 = 5625

Hence, 5625 items of Item #780 will be ordered just during the second fiscal quarter.

Based on the annual forecast for #780, the number of units that will be ordered in the second quarter is 5,250 units.

First find the amount ordered quarterly:
= Annual order / 4 quarters in year

= 15,000 / 4

= 3,500 units

The second quarter has a seasonal relative of 1.5 which means that the units will increase by:
= 3,500 x 1.5

= 5,250 units

In conclusion, 5,250 units will be ordered.

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