What Is Relative Link Method Of Seasonal Variations?


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amber Jhon answered
In relative link method of seasonal variations, link relatives are calculated for all the values of the data.

Link relatives = value of a year/ value of previous quarter or month * 100

Then we calculate the sum of link relatives for each quarter or month. Average of these totals are calculated by dividing the totals by the total number of years in a quarter or month. Chain indices are calculated from these averages.

Chain indices = average link relative of the year * chain index of previous year / 100

For first month or quarter, two chain indices are calculated. Adjustment factor is calculated by taking difference of two chain indices of first month or quarter and dividing it by number of months or number of quarters. The seasonal indicies are calculated by subtracting adjustment factor from second quarter or month, twice of adjustment factor from third quarter or month and so on. The seasonal index for first quarter or month remains hundred.

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