Question:
Which of the following method is not used to calculate seasonal indices in a time series?
Which of the following method is not used to calculate seasonal indices in a time series?
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One of the listed methods is used to estimate the variance of the random component and the degree of trend, not seasonal indices.
Updated On: Jul 4, 2026
- Least square method
- Link relative method
- Variate difference method
- Moving average method
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The Correct Option is C
Solution and Explanation
Step 1: The standard methods taught for measuring seasonal variation and computing seasonal indices are the method of simple averages, the ratio-to-trend method, the ratio-to-moving-average method, and the link relative method.
Step 2: The moving average method (option D) is used directly, in the ratio-to-moving-average approach, to eliminate trend and cyclical effects so that seasonal indices can be isolated. The link relative method (option B) is itself one of the four classical methods. The least square method (option A) is used to fit the trend line in the ratio-to-trend method, which is then used to compute seasonal indices, so it too plays a role in seasonal index calculation.
Step 3: The variate difference method is a different technique altogether. It is used to determine the degree of the polynomial trend present in a series and to isolate and estimate the variance of the random (irregular) component by taking successive differences of the series; it is not used to compute seasonal indices.
Step 4: Hence the method not used to calculate seasonal indices is the variate difference method, option C.
\[\boxed{\text{Variate difference method}}\]Was this answer helpful?
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