In the context of seasonal demand forecasting, what is the purpose of dividing total demand by the number of seasons?

Dividing total demand by the number of seasons serves the purpose of estimating average demand for each season. This method allows businesses to assess how much product they can expect to sell during a specific period of the year, based on historical data and seasonal patterns. By calculating this average, companies can plan their inventory, production schedules, and marketing strategies more effectively to match the expected seasonal fluctuations in demand. Understanding average seasonal demand helps in optimizing resources and ensuring that supply aligns with customer needs throughout the year.

While normalizing the data, determining market trends, or analyzing seasonal behaviors are important aspects of demand forecasting, they are not the primary focus of this specific calculation. The key goal here is to derive a straightforward average demand figure that reflects expected sales during each season based on total annual demand.