1. Suppose John's banker asked for two sentences to show his boss that would justify John's request to make extra loan payments in some months and no payments in others. Write these two sentences.
2. Assume that John will do exactly twice as much business in Seattle as Spokane next year. Determine the Seattle seasonal indexes that would be ideal to balance out the monthly revenues for Mr. Tux.
3. Disregarding Seattle, how much volume would John have to realize from his shirt-making machine to make both January and February "average"?
John Mosby has been looking forward to the decomposition of his time series, monthly sales dollars. He knows that the series has a strong seasonal effect and would like it measured for two reasons. First, his banker is reluctant to allow him to make variable monthly payments on his loan. John has explained that because of the seasonality of his sales and monthly cash flow, he would like to make extra payments in some months and reduced payments, and even no payments, in others. His banker wants to see some verification of John's assertion that his sales have a strong seasonal effect.