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Practice Exercise · Q11
Q.

Compute the seasonal indices by 4-year moving averages from the given data of production of paper (in thousand tons)

Year1980198119821983198419851986198719881989
Index number2450147021501800121019502300250024802680
Delhi CbseNCERTSubjective· 3mImportance★★★★★
83% · 33/40 Questions
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The 4-year moving totals fall between years, so they are centred (2-year average) to line up with a year; the resulting trend runs 1812.5 → 2398.75 (’000 tons) for 1982–1987.

4-year moving average (even period ⇒ must be centred):

4-yr total=yt+yt+1+yt+2+yt+3,4-yr avg=4-yr total4\text{4-yr total}=y_t+y_{t+1}+y_{t+2}+y_{t+3},\quad \text{4-yr avg}=\frac{\text{4-yr total}}{4}

centred value=(avg)before+(avg)after2\text{centred value}=\frac{(\text{avg})_{\text{before}}+(\text{avg})_{\text{after}}}{2}

Steps

  1. Because 4 is even, each 4-year total sits between two years. Form the totals and divide by 4:
YearProd. yy4-yr moving total4-yr moving avg
19802450
19811470787078701967.51967.5
19822150663066301657.51657.5
19831800711071101777.51777.5
19841210726072601815.01815.0
19851950796079601990.01990.0
19862300923092302307.52307.5
19872500996099602490.02490.0
19882480
19892680

(7870=2450+1470+2150+18007870=2450+1470+2150+1800, 6630=1470+2150+1800+12106630=1470+2150+1800+1210, and so on.)

  1. The averages lie mid-way between years; centre them (average consecutive pairs) so they align with a year:
YearCentred 4-yr moving average (trend)
19821967.5+1657.52=1812.5\frac{1967.5+1657.5}{2}=1812.5
19831657.5+1777.52=1717.5\frac{1657.5+1777.5}{2}=1717.5
19841777.5+1815.02=1796.25\frac{1777.5+1815.0}{2}=1796.25
19851815.0+1990.02=1902.5\frac{1815.0+1990.0}{2}=1902.5
19861990.0+2307.52=2148.75\frac{1990.0+2307.5}{2}=2148.75
19872307.5+2490.02=2398.75\frac{2307.5+2490.0}{2}=2398.75
  1. These centred values are the smoothed trend of paper production. …

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