In moving-average seasonal analysis, which option represents seasonal variation?

In moving-average seasonal analysis, which option represents seasonal variation?

• A. The ratio of Actual to moving average.
• B. The moving average itself.
• C. The Actual value.
• D. The difference between Actual and moving average.

Answer: (D)

In moving-average seasonal analysis (additive approach), you first smooth the data with a moving average to estimate the underlying level or trend. Seasonal variation is what stands out when you strip away that trend—it's how much the actual value differs from the smoothed trend estimate. So the seasonal variation is the difference between the Actual value and the moving-average estimate. This quantity isolates the fluctuations that repeat with the season, independent of the overall level. The ratio of Actual to moving average would reflect a multiplicative relationship, not the additive seasonal deviation. The moving average itself is the trend component, not the seasonal part. The Actual value includes both trend and seasonal components, so it’s not the seasonal variation by itself.

In moving-average seasonal analysis (additive approach), you first smooth the data with a moving average to estimate the underlying level or trend. Seasonal variation is what stands out when you strip away that trend—it's how much the actual value differs from the smoothed trend estimate.

So the seasonal variation is the difference between the Actual value and the moving-average estimate. This quantity isolates the fluctuations that repeat with the season, independent of the overall level.

The ratio of Actual to moving average would reflect a multiplicative relationship, not the additive seasonal deviation. The moving average itself is the trend component, not the seasonal part. The Actual value includes both trend and seasonal components, so it’s not the seasonal variation by itself.