Incorporating Seasonality in Forecasting

The basic steps to incorporate seasonality in forecasting are as follows  

Step 1 Compute the seasonality index for any period given by 

Step 2 Seasonally adjust the actual demands in the time series by dividing by the seasonality index, to get deseasonalized demand data. 

Step 3 Select an appropriate time series forecasting method. 

Step 4 Apply the forecasting method on the deseasonalized demand forecast. 

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