When forecasting seasonal demand with trends, which step comes first?

The correct first step in forecasting seasonal demand with trends is to determine the length of the seasonal cycle. This step is essential because it establishes the framework for understanding the time period over which seasonality occurs. By identifying how long the seasonal patterns last—whether it's a week, month, quarter, or year—you create a basis for the analysis and ensure that subsequent steps can appropriately handle the data within that defined cycle.

Once you know the length of the seasonal cycle, you can accurately calculate the seasonal index, create an unseasonalized forecast, and then seasonalize the forecast. Without this initial knowledge, the other steps could lead to misinterpretations or inaccuracies in forecasting demand. Essentially, determining the length of the seasonal cycle is foundational and informs all subsequent calculations and adjustments needed for effective seasonal demand forecasting.